How Should Investors Feel About Allreal Holding's (VTX:ALLN) CEO Remuneration?

Roger Herzog has been the CEO of Allreal Holding AG (VTX:ALLN) 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 Allreal Holding pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Allreal Holding

How Does Total Compensation For Roger Herzog Compare With Other Companies In The Industry?

According to our data, Allreal Holding AG has a market capitalization of CHF3.2b, and paid its CEO total annual compensation worth CHF1.2m over the year to December 2019. That's just a smallish increase of 3.4% on last year. Notably, the salary which is CHF730.0k, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between CHF1.8b and CHF5.8b had a median total CEO compensation of CHF1.0m. From this we gather that Roger Herzog is paid around the median for CEOs in the industry. Moreover, Roger Herzog also holds CHF548k worth of Allreal Holding stock directly under their own name.

On an industry level, roughly 55% of total compensation represents salary and 45% is other remuneration. Allreal Holding pays out 61% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Allreal Holding AG's Growth

Allreal Holding AG has seen its earnings per share (EPS) increase by 11% a year over the past three years. In the last year, its revenue is down 7.1%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Allreal Holding AG Been A Good Investment?

We think that the total shareholder return of 35%, over three years, would leave most Allreal Holding AG shareholders smiling. 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 we noted earlier, Allreal Holding pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Roger is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Allreal Holding (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

When trading Allreal Holding or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.