Shareholders Will Probably Hold Off On Increasing Kudelski SA's (VTX:KUD) CEO Compensation For The Time Being

Key Insights

• Kudelski's Annual General Meeting to take place on 20th of April
• Total pay for CEO André Kudelski includes US$639.9k salary
• The overall pay is 947% above the industry average
• Over the past three years, Kudelski's EPS grew by 44% and over the past three years, the total loss to shareholders 44%

The underwhelming share price performance of Kudelski SA (VTX:KUD) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 20th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Kudelski

Comparing Kudelski SA's CEO Compensation With The Industry

Our data indicates that Kudelski SA has a market capitalization of CHF96m, and total annual CEO compensation was reported as US$3.6m for the year to December 2022. Notably, that's a decrease of 40% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$640k.

In comparison with other companies in the Swiss Electronic industry with market capitalizations under CHF179m, the reported median total CEO compensation was US$343k. This suggests that André Kudelski is paid more than the median for the industry. What's more, André Kudelski holds CHF34m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	US$640k	US$624k	18%
Other	US$3.0m	US$5.4m	82%
Total Compensation	US$3.6m	US$6.0m	100%

Talking in terms of the industry, salary represented approximately 36% of total compensation out of all the companies we analyzed, while other remuneration made up 64% of the pie. Kudelski pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Kudelski SA's Growth Numbers

Kudelski SA has seen its earnings per share (EPS) increase by 44% a year over the past three years. Its revenue is down 6.4% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Kudelski SA Been A Good Investment?

With a total shareholder return of -44% over three years, Kudelski SA shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 Kudelski 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.