We Think Some Shareholders May Hesitate To Increase SIG Group AG's (VTX:SIGN) CEO Compensation

Key Insights

• SIG Group to hold its Annual General Meeting on 23rd of April
• Total pay for CEO Samuel Sigrist includes €753.9k salary
• The total compensation is similar to the average for the industry
• SIG Group's three-year loss to shareholders was 8.7% while its EPS grew by 44% over the past three years

In the past three years, the share price of SIG Group AG (VTX:SIGN) has struggled to generate growth for its shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 23rd of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for SIG Group

How Does Total Compensation For Samuel Sigrist Compare With Other Companies In The Industry?

At the time of writing, our data shows that SIG Group AG has a market capitalization of CHF7.4b, and reported total annual CEO compensation of €2.8m for the year to December 2023. That's a notable decrease of 11% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €754k.

For comparison, other companies in the Switzerland Packaging industry with market capitalizations ranging between CHF3.7b and CHF11b had a median total CEO compensation of €3.4m. From this we gather that Samuel Sigrist is paid around the median for CEOs in the industry. Moreover, Samuel Sigrist also holds CHF4.3m worth of SIG Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	€754k	€707k	27%
Other	€2.1m	€2.5m	73%
Total Compensation	€2.8m	€3.2m	100%

Talking in terms of the industry, salary represented approximately 46% of total compensation out of all the companies we analyzed, while other remuneration made up 54% of the pie. SIG Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at SIG Group AG's Growth Numbers

SIG Group AG's earnings per share (EPS) grew 44% per year over the last three years. Its revenue is up 16% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 SIG Group AG Been A Good Investment?

Since shareholders would have lost about 8.7% over three years, some SIG Group AG investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for SIG Group that investors should be aware of in a dynamic business environment.

Important note: SIG Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.