PSP Swiss Property AG's (VTX:PSPN) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• PSP Swiss Property's Annual General Meeting to take place on 4th of April
• Salary of CHF652.0k is part of CEO Giacomo Balzarini's total remuneration
• The overall pay is 121% above the industry average
• PSP Swiss Property's total shareholder return over the past three years was 12% while its EPS was down 11% over the past three years

Despite positive share price growth of 12% for PSP Swiss Property AG (VTX:PSPN) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 4th of April. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for PSP Swiss Property

Comparing PSP Swiss Property AG's CEO Compensation With The Industry

According to our data, PSP Swiss Property AG has a market capitalization of CHF5.4b, and paid its CEO total annual compensation worth CHF2.2m over the year to December 2023. Notably, that's an increase of 10% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CHF652k.

For comparison, other companies in the Swiss Real Estate industry with market capitalizations ranging between CHF3.6b and CHF11b had a median total CEO compensation of CHF996k. This suggests that Giacomo Balzarini is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	CHF652k	CHF652k	30%
Other	CHF1.5m	CHF1.3m	70%
Total Compensation	CHF2.2m	CHF2.0m	100%

On an industry level, roughly 51% of total compensation represents salary and 49% is other remuneration. It's interesting to note that PSP Swiss Property allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

PSP Swiss Property AG's Growth

Over the last three years, PSP Swiss Property AG has shrunk its earnings per share by 11% per year. Its revenue is down 10% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has PSP Swiss Property AG Been A Good Investment?

With a total shareholder return of 12% over three years, PSP Swiss Property AG shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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 2 warning signs for PSP Swiss Property you should be aware of, and 1 of them doesn't sit too well with us.

Switching gears from PSP Swiss Property, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.