Our View On Jungfraubahn Holding's (VTX:JFN) CEO Pay

Urs Kessler became the CEO of Jungfraubahn Holding AG (VTX:JFN) in 2008, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Jungfraubahn Holding

Comparing Jungfraubahn Holding AG's CEO Compensation With the industry

At the time of writing, our data shows that Jungfraubahn Holding AG has a market capitalization of CHF819m, and reported total annual CEO compensation of CHF800k for the year to December 2019. That's a slightly lower by 6.5% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CHF331k.

In comparison with other companies in the industry with market capitalizations ranging from CHF356m to CHF1.4b, the reported median CEO total compensation was CHF732k. So it looks like Jungfraubahn Holding compensates Urs Kessler in line with the median for the industry. Moreover, Urs Kessler also holds CHF5.1m worth of Jungfraubahn Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. It's interesting to note that Jungfraubahn Holding allocates a smaller portion of compensation to salary in comparison 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.

Jungfraubahn Holding AG's Growth

Jungfraubahn Holding AG has reduced its earnings per share by 22% a year over the last three years. In the last year, its revenue is down 21%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Jungfraubahn Holding AG Been A Good Investment?

Jungfraubahn Holding AG has served shareholders reasonably well, with a total return of 14% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we noted earlier, Jungfraubahn Holding pays its CEO in line with similar-sized companies belonging to the same industry. Jungfraubahn Holding has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. These figures do not go well against CEO compensation, which is more or less equal to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Jungfraubahn Holding that you should be aware of before investing.

Important note: Jungfraubahn 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.

When trading Jungfraubahn Holding or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.