Increases to Kuehne + Nagel International AG's (VTX:KNIN) CEO Compensation Might Cool off for now

Key Insights

• Kuehne + Nagel International will host its Annual General Meeting on 8th of May
• CEO Stefan Paul's total compensation includes salary of CHF1.20m
• Total compensation is 92% above industry average
• Kuehne + Nagel International's EPS grew by 9.2% over the past three years while total shareholder loss over the past three years was 3.8%

In the past three years, shareholders of Kuehne + Nagel International AG (VTX:KNIN) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 8th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Kuehne + Nagel International

Comparing Kuehne + Nagel International AG's CEO Compensation With The Industry

Our data indicates that Kuehne + Nagel International AG has a market capitalization of CHF29b, and total annual CEO compensation was reported as CHF3.5m for the year to December 2023. We note that's a decrease of 28% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CHF1.2m.

On comparing similar companies in the Switzerland Shipping industry with market capitalizations above CHF7.4b, we found that the median total CEO compensation was CHF1.8m. Accordingly, our analysis reveals that Kuehne + Nagel International AG pays Stefan Paul north of the industry median. What's more, Stefan Paul holds CHF5.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	CHF1.2m	CHF908k	35%
Other	CHF2.3m	CHF3.9m	65%
Total Compensation	CHF3.5m	CHF4.8m	100%

Speaking on an industry level, nearly 37% of total compensation represents salary, while the remainder of 63% is other remuneration. Although there is a difference in how total compensation is set, Kuehne + Nagel International 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.

Kuehne + Nagel International AG's Growth

Over the past three years, Kuehne + Nagel International AG has seen its earnings per share (EPS) grow by 9.2% per year. In the last year, its revenue is down 37%.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Kuehne + Nagel International AG Been A Good Investment?

Given the total shareholder loss of 3.8% over three years, many shareholders in Kuehne + Nagel International AG are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Kuehne + Nagel International (2 can't be ignored!) that you should be aware of before investing here.

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.