Johann Reiter has been the CEO of Vetropack Holding AG (VTX:VETN) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Vetropack Holding
Comparing Vetropack Holding AG's CEO Compensation With the industry
At the time of writing, our data shows that Vetropack Holding AG has a market capitalization of CHF1.3b, and reported total annual CEO compensation of CHF1.0m for the year to December 2019. Notably, that's an increase of 17% over the year before. In particular, the salary of CHF535.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from CHF888m to CHF2.8b, we found that the median CEO total compensation was CHF1.0m. From this we gather that Johann Reiter is paid around the median for CEOs in the industry.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CHF535k | CHF475k | 52% |
| Other | CHF486k | CHF401k | 48% |
| Total Compensation | CHF1.0m | CHF876k | 100% |
On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. In Vetropack Holding's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Vetropack Holding AG's Growth Numbers
Over the past three years, Vetropack Holding AG has seen its earnings per share (EPS) grow by 24% per year. Its revenue is down 3.3% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Vetropack Holding AG Been A Good Investment?
Boasting a total shareholder return of 68% over three years, Vetropack Holding AG has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
As we noted earlier, Vetropack Holding pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Vetropack Holding that investors should look into moving forward.
Important note: Vetropack Holding 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. 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.
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About SWX:VETN
Vetropack Holding
Offers glass packaging products for the food and beverage industry.
Excellent balance sheet and good value.
