Here's What We Learned About The CEO Pay At Roche Holding AG (VTX:ROG)

Severin Schwan has been the CEO of Roche Holding AG (VTX:ROG) since 2008, 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 Roche Holding

Comparing Roche Holding AG's CEO Compensation With the industry

At the time of writing, our data shows that Roche Holding AG has a market capitalization of CHF269b, and reported total annual CEO compensation of CHF11m for the year to December 2020. That's a slightly lower by 4.2% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CHF3.5m.

In comparison with other companies in the industry with market capitalizations over CHF7.1b , the reported median total CEO compensation was CHF8.1m. Hence, we can conclude that Severin Schwan is remunerated higher than the industry median. Furthermore, Severin Schwan directly owns CHF71m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 30% of total compensation represents salary, while the remainder of 70% is other remuneration. Our data reveals that Roche Holding allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Roche Holding AG's Growth

Over the past three years, Roche Holding AG has seen its earnings per share (EPS) grow by 18% per year. Its revenue is down 5.3% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Roche Holding AG Been A Good Investment?

We think that the total shareholder return of 54%, over three years, would leave most Roche Holding AG shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we touched on above, Roche Holding AG is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth and shareholder returns have been top-notch for the past three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. Given the strong history of shareholder returns, the shareholders are probably very happy with Severin's performance.

Whatever your view on compensation, you might want to check if insiders are buying or selling Roche Holding shares (free trial).

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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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