How Should Investors React To Cassiopea's (VTX:SKIN) CEO Pay?

Simply Wall St
October 06, 2020

Diana Harbort has been the CEO of Cassiopea S.p.A. (VTX:SKIN) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Cassiopea pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Cassiopea

How Does Total Compensation For Diana Harbort Compare With Other Companies In The Industry?

According to our data, Cassiopea S.p.A. has a market capitalization of CHF500m, and paid its CEO total annual compensation worth €483k over the year to December 2019. That's a notable increase of 75% on last year. In particular, the salary of €354.6k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between CHF183m and CHF732m had a median total CEO compensation of €409k. From this we gather that Diana Harbort is paid around the median for CEOs in the industry.

Component20192018Proportion (2019)
Salary €355k €170k 73%
Other €128k €106k 27%
Total Compensation€483k €276k100%

Talking in terms of the industry, salary represented approximately 28% of total compensation out of all the companies we analyzed, while other remuneration made up 72% of the pie. Cassiopea is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

SWX:SKIN CEO Compensation October 6th 2020

Cassiopea S.p.A.'s Growth

Cassiopea S.p.A.'s earnings per share (EPS) grew 2.3% per year over the last three years. It saw its revenue drop 25% over the last year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Cassiopea S.p.A. Been A Good Investment?

Boasting a total shareholder return of 53% over three years, Cassiopea S.p.A. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As previously discussed, Diana is compensated close to the median for companies of its size, and which belong to the same industry. However, the company's EPS growth numbers over the last three years is not that impressive. On the other hand, shareholder returns over the same period have been very healthy. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before a bump in pay.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Cassiopea that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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