Here's Why Shareholders May Want To Be Cautious With Increasing OVB Holding AG's (ETR:O4B) CEO Pay Packet

By
Simply Wall St
Published
June 02, 2021
XTRA:O4B
Source: Shutterstock

Under the guidance of CEO Mario Freis, OVB Holding AG (ETR:O4B) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 09 June 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for OVB Holding

Comparing OVB Holding AG's CEO Compensation With the industry

Our data indicates that OVB Holding AG has a market capitalization of €299m, and total annual CEO compensation was reported as €774k for the year to December 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is €440.0k, represents a considerable chunk of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from €164m to €655m, we found that the median CEO total compensation was €544k. This suggests that Mario Freis is paid more than the median for the industry.

Component20202019Proportion (2020)
Salary €440k €440k 57%
Other €334k €330k 43%
Total Compensation€774k €770k100%

Speaking on an industry level, nearly 57% of total compensation represents salary, while the remainder of 43% is other remuneration. There isn't a significant difference between OVB Holding and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
XTRA:O4B CEO Compensation June 3rd 2021

A Look at OVB Holding AG's Growth Numbers

OVB Holding AG's earnings per share (EPS) grew 3.3% per year over the last three years. Its revenue is up 7.7% over the last year.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. 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 OVB Holding AG Been A Good Investment?

With a total shareholder return of 17% over three years, OVB Holding AG shareholders would, in general, be reasonably content. 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...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for OVB Holding that investors should be aware of in a dynamic business environment.

Switching gears from OVB Holding, 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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