Shareholders Will Probably Hold Off On Increasing Vestas Wind Systems A/S' (CPH:VWS) CEO Compensation For The Time Being

Key Insights

• Vestas Wind Systems' Annual General Meeting to take place on 8th of April
• CEO Henrik Andersen's total compensation includes salary of €1.82m
• The overall pay is 85% above the industry average
• Over the past three years, Vestas Wind Systems' EPS grew by 55% and over the past three years, the total loss to shareholders 56%

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In the past three years, the share price of Vestas Wind Systems A/S (CPH:VWS) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 8th of April. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Vestas Wind Systems

How Does Total Compensation For Henrik Andersen Compare With Other Companies In The Industry?

At the time of writing, our data shows that Vestas Wind Systems A/S has a market capitalization of kr.96b, and reported total annual CEO compensation of €5.4m for the year to December 2024. Notably, that's a decrease of 37% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.8m.

In comparison with other companies in the Denmark Electrical industry with market capitalizations over kr.55b, the reported median total CEO compensation was €2.9m. This suggests that Henrik Andersen is paid more than the median for the industry. Moreover, Henrik Andersen also holds kr.23m worth of Vestas Wind Systems 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 52% of total compensation represents salary and 48% is other remuneration. In Vestas Wind Systems' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Vestas Wind Systems A/S' Growth Numbers

Over the past three years, Vestas Wind Systems A/S has seen its earnings per share (EPS) grow by 55% per year. Its revenue is up 12% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Vestas Wind Systems A/S Been A Good Investment?

With a total shareholder return of -56% over three years, Vestas Wind Systems A/S shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Vestas Wind Systems that investors should think about before committing capital to this stock.

Switching gears from Vestas Wind Systems, 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. 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.