Increases to Laiqon AG's (ETR:LQAG) CEO Compensation Might Cool off for now

Key Insights

• Laiqon will host its Annual General Meeting on 29th of August
• Salary of €378.0k is part of CEO Achim Plate's total remuneration
• Total compensation is 150% above industry average
• Laiqon's three-year loss to shareholders was 42% while its EPS was down 90% over the past three years

Shareholders of Laiqon AG (ETR:LQAG) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 29th of August, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Check out our latest analysis for Laiqon

How Does Total Compensation For Achim Plate Compare With Other Companies In The Industry?

Our data indicates that Laiqon AG has a market capitalization of €99m, and total annual CEO compensation was reported as €486k for the year to December 2023. Notably, that's a decrease of 20% over the year before. In particular, the salary of €378.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the German Capital Markets industry with market capitalizations below €180m, we found that the median total CEO compensation was €194k. Hence, we can conclude that Achim Plate is remunerated higher than the industry median. Furthermore, Achim Plate directly owns €7.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2021	Proportion (2023)
Salary	€378k	€360k	78%
Other	€108k	€251k	22%
Total Compensation	€486k	€611k	100%

Talking in terms of the industry, salary represented approximately 47% of total compensation out of all the companies we analyzed, while other remuneration made up 53% of the pie. Laiqon pays out 78% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Laiqon AG's Growth Numbers

Laiqon AG has reduced its earnings per share by 90% a year over the last three years. It achieved revenue growth of 43% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. 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 Laiqon AG Been A Good Investment?

Few Laiqon AG shareholders would feel satisfied with the return of -42% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Laiqon that investors should think about before committing capital to this stock.

Important note: Laiqon 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. 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.