Markus Ehrle has been the CEO of APG|SGA SA (VTX:APGN) since 2014, 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.
See our latest analysis for APG|SGA
Comparing APG|SGA SA's CEO Compensation With the industry
According to our data, APG|SGA SA has a market capitalization of CHF604m, and paid its CEO total annual compensation worth CHF1.1m over the year to December 2019. That's a fairly small increase of 4.3% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at CHF437k.
On comparing similar companies from the same industry with market caps ranging from CHF356m to CHF1.4b, we found that the median CEO total compensation was CHF1.4m. So it looks like APG|SGA compensates Markus Ehrle in line with the median for the industry.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CHF437k | CHF435k | 41% |
| Other | CHF627k | CHF585k | 59% |
| Total Compensation | CHF1.1m | CHF1.0m | 100% |
On an industry level, around 48% of total compensation represents salary and 52% is other remuneration. APG|SGA 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.
APG|SGA SA's Growth
APG|SGA SA has reduced its earnings per share by 31% a year over the last three years. Its revenue is down 11% over the previous year.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has APG|SGA SA Been A Good Investment?
With a three year total loss of 50% for the shareholders, APG|SGA SA would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we touched on above, APG|SGA SA is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for APG|SGA (1 doesn't sit too well with us!) that you should be aware of before investing here.
Important note: APG|SGA 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:APGN
APG|SGA
Provides advertising services primarily in Switzerland and Serbia.
Excellent balance sheet with proven track record.
