Should Shareholders Worry About Flughafen Zürich AG's (VTX:FHZN) CEO Compensation Package?

The underwhelming performance at Flughafen Zürich AG (VTX:FHZN) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 22 April 2021. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for Flughafen Zürich

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

At the time of writing, our data shows that Flughafen Zürich AG has a market capitalization of CHF4.8b, and reported total annual CEO compensation of CHF933k for the year to December 2020. Notably, that's a decrease of 14% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CHF400k.

On comparing similar companies from the same industry with market caps ranging from CHF3.7b to CHF11b, we found that the median CEO total compensation was CHF1.5m. This suggests that Stephan Widrig is paid below the industry median. What's more, Stephan Widrig holds CHF1.1m worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	CHF400k	CHF400k	43%
Other	CHF533k	CHF683k	57%
Total Compensation	CHF933k	CHF1.1m	100%

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. Flughafen Zürich pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Flughafen Zürich AG's Growth Numbers

Over the last three years, Flughafen Zürich AG has shrunk its earnings per share by 34% per year. It saw its revenue drop 48% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Flughafen Zürich AG Been A Good Investment?

Given the total shareholder loss of 18% over three years, many shareholders in Flughafen Zürich AG are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Flughafen Zürich that you should be aware of before investing.

Switching gears from Flughafen Zürich, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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