How Does BVZ Holding's (VTX:BVZN) CEO Pay Compare With Company Performance?

Fernando Lehner has been the CEO of BVZ Holding AG (VTX:BVZN) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether BVZ Holding pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for BVZ Holding

Comparing BVZ Holding AG's CEO Compensation With the industry

Our data indicates that BVZ Holding AG has a market capitalization of CHF158m, and total annual CEO compensation was reported as CHF405k for the year to December 2019. That's just a smallish increase of 3.7% on last year. Notably, the salary which is CHF271.8k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from CHF91m to CHF365m, we found that the median CEO total compensation was CHF496k. This suggests that BVZ Holding remunerates its CEO largely in line with the industry average.

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. Although there is a difference in how total compensation is set, BVZ Holding more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at BVZ Holding AG's Growth Numbers

BVZ Holding AG has reduced its earnings per share by 28% a year over the last three years. Its revenue is down 13% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has BVZ Holding AG Been A Good Investment?

BVZ Holding AG has served shareholders reasonably well, with a total return of 26% 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...

As previously discussed, Fernando is compensated close to the median for companies of its size, and which belong to the same industry. According to our analysis, BVZ Holding is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. This doesn't compare well with CEO compensation, which is largely in line with the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for BVZ Holding that investors should look into moving forward.

Important note: BVZ Holding 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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