Stock Analysis

We Think Some Shareholders May Hesitate To Increase Givaudan SA's (VTX:GIVN) CEO Compensation

Source: Shutterstock

Key Insights

  • Givaudan will host its Annual General Meeting on 23rd of March
  • CEO Gilles Andrier's total compensation includes salary of CHF1.23m
  • The overall pay is 83% above the industry average
  • Givaudan's EPS grew by 6.8% over the past three years while total shareholder return over the past three years was 1.0%

Performance at Givaudan SA (VTX:GIVN) has been reasonably good and CEO Gilles Andrier has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 23rd of March, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Givaudan

How Does Total Compensation For Gilles Andrier Compare With Other Companies In The Industry?

Our data indicates that Givaudan SA has a market capitalization of CHF27b, and total annual CEO compensation was reported as CHF6.0m for the year to December 2022. That's a notable decrease of 12% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CHF1.2m.

In comparison with other companies in the Swiss Chemicals industry with market capitalizations over CHF7.4b, the reported median total CEO compensation was CHF3.3m. Accordingly, our analysis reveals that Givaudan SA pays Gilles Andrier north of the industry median. Furthermore, Gilles Andrier directly owns CHF14m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20222021Proportion (2022)
Salary CHF1.2m CHF1.2m 20%
Other CHF4.8m CHF5.6m 80%
Total CompensationCHF6.0m CHF6.8m100%

Talking in terms of the industry, salary represented approximately 28% of total compensation out of all the companies we analyzed, while other remuneration made up 72% of the pie. Givaudan pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

SWX:GIVN CEO Compensation March 17th 2023

Givaudan SA's Growth

Over the past three years, Givaudan SA has seen its earnings per share (EPS) grow by 6.8% per year. Its revenue is up 6.5% over the last year.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Givaudan SA Been A Good Investment?

Givaudan SA has generated a total shareholder return of 1.0% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Givaudan that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

Valuation is complex, but we're helping make it simple.

Find out whether Givaudan is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis