René Zahnd became the CEO of Swiss Prime Site AG (VTX:SPSN) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Swiss Prime Site pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Swiss Prime Site
How Does Total Compensation For René Zahnd Compare With Other Companies In The Industry?
According to our data, Swiss Prime Site AG has a market capitalization of CHF6.4b, and paid its CEO total annual compensation worth CHF1.8m over the year to December 2019. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CHF900k.
On examining similar-sized companies in the industry with market capitalizations between CHF3.6b and CHF11b, we discovered that the median CEO total compensation of that group was CHF1.2m. This suggests that René Zahnd is paid more than the median for the industry. What's more, René Zahnd holds CHF376k worth of shares in the company in their own name.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CHF900k | CHF900k | 50% |
| Other | CHF913k | CHF880k | 50% |
| Total Compensation | CHF1.8m | CHF1.8m | 100% |
Speaking on an industry level, nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. There isn't a significant difference between Swiss Prime Site and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Swiss Prime Site AG's Growth Numbers
Swiss Prime Site AG's earnings per share (EPS) grew 17% per year over the last three years. In the last year, its revenue is up 3.9%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Swiss Prime Site AG Been A Good Investment?
Swiss Prime Site AG has served shareholders reasonably well, with a total return of 11% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As we touched on above, Swiss Prime Site 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 the company has impressed us with its EPS growth, over three years. We also think investor returns are steady over the same time period. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 2 which can't be ignored) in Swiss Prime Site we think you should know about.
Important note: Swiss Prime Site 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. 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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About SWX:SPSN
Swiss Prime Site
Through its subsidiaries, operates as a real estate company in Switzerland.
Second-rate dividend payer low.
