Shareholders Will Probably Hold Off On Increasing Asmallworld AG's (VTX:ASWN) CEO Compensation For The Time Being

Key Insights

• Asmallworld's Annual General Meeting to take place on 26th of April
• Salary of CHF307.0k is part of CEO Jan Luescher's total remuneration
• The total compensation is 70% higher than the average for the industry
• Over the past three years, Asmallworld's EPS grew by 22% and over the past three years, the total loss to shareholders 44%

The underwhelming share price performance of Asmallworld AG (VTX:ASWN) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 26th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Asmallworld

How Does Total Compensation For Jan Luescher Compare With Other Companies In The Industry?

At the time of writing, our data shows that Asmallworld AG has a market capitalization of CHF23m, and reported total annual CEO compensation of CHF468k for the year to December 2023. That is, the compensation was roughly the same as last year. In particular, the salary of CHF307.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Switzerland Interactive Media and Services industry with market capitalizations under CHF182m, the reported median total CEO compensation was CHF275k. Hence, we can conclude that Jan Luescher is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	CHF307k	CHF303k	66%
Other	CHF161k	CHF173k	34%
Total Compensation	CHF468k	CHF476k	100%

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. There isn't a significant difference between Asmallworld and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Asmallworld AG's Growth Numbers

Over the past three years, Asmallworld AG has seen its earnings per share (EPS) grow by 22% per year. Its revenue is up 15% 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Asmallworld AG Been A Good Investment?

Few Asmallworld AG shareholders would feel satisfied with the return of -44% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for Asmallworld you should be aware of, and 1 of them shouldn't be ignored.

Important note: Asmallworld 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.