We Discuss Why Comet Holding AG's (VTX:COTN) CEO Compensation May Be Closely Reviewed

Key Insights

• Comet Holding will host its Annual General Meeting on 10th of April
• CEO Stephan Haferl's total compensation includes salary of CHF500.0k
• The total compensation is similar to the average for the industry
• Comet Holding's EPS declined by 20% over the past three years while total shareholder loss over the past three years was 15%

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Shareholders will probably not be too impressed with the underwhelming results at Comet Holding AG (VTX:COTN) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 10th of April. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Comet Holding

How Does Total Compensation For Stephan Haferl Compare With Other Companies In The Industry?

According to our data, Comet Holding AG has a market capitalization of CHF1.6b, and paid its CEO total annual compensation worth CHF1.4m over the year to December 2024. That's a notable increase of 64% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CHF500k.

On examining similar-sized companies in the Swiss Electronic industry with market capitalizations between CHF859m and CHF2.8b, we discovered that the median CEO total compensation of that group was CHF1.2m. So it looks like Comet Holding compensates Stephan Haferl in line with the median for the industry. Furthermore, Stephan Haferl directly owns CHF459k worth of shares in the company.

Talking in terms of the industry, salary represented approximately 40% of total compensation out of all the companies we analyzed, while other remuneration made up 60% of the pie. Comet Holding is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Comet Holding AG's Growth

Comet Holding AG has reduced its earnings per share by 20% a year over the last three years. Its revenue is up 12% over the last year.

The decline in EPS is a bit concerning. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Comet Holding AG Been A Good Investment?

Since shareholders would have lost about 15% over three years, some Comet Holding AG investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Comet Holding that investors should be aware of in a dynamic business environment.

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.

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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.