We Think The Compensation For Schaffner Holding AG's (VTX:SAHN) CEO Looks About Right

The share price of Schaffner Holding AG (VTX:SAHN) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 11 January 2022. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. 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.

Check out our latest analysis for Schaffner Holding

Comparing Schaffner Holding AG's CEO Compensation With the industry

According to our data, Schaffner Holding AG has a market capitalization of CHF205m, and paid its CEO total annual compensation worth CHF873k over the year to September 2021. Notably, that's an increase of 32% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CHF425k.

In comparison with other companies in the industry with market capitalizations ranging from CHF92m to CHF366m, the reported median CEO total compensation was CHF873k. This suggests that Schaffner Holding remunerates its CEO largely in line with the industry average. What's more, Marc Aeschlimann holds CHF558k worth of shares in the company in their own name.

Component	2021	2020	Proportion (2021)
Salary	CHF425k	CHF409k	49%
Other	CHF448k	CHF251k	51%
Total Compensation	CHF873k	CHF660k	100%

Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. Although there is a difference in how total compensation is set, Schaffner Holding more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Schaffner Holding AG's Growth

Schaffner Holding AG has reduced its earnings per share by 51% a year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Schaffner Holding AG Been A Good Investment?

Schaffner Holding AG has served shareholders reasonably well, with a total return of 30% over three years. 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...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. 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 can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Schaffner Holding that you should be aware of before investing.

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.