We Think Some Shareholders May Hesitate To Increase Kendrion N.V.'s (AMS:KENDR) CEO Compensation

Key Insights

• Kendrion will host its Annual General Meeting on 15th of April
• Total pay for CEO Joep van Beurden includes €553.3k salary
• The total compensation is 66% higher than the average for the industry
• Over the past three years, Kendrion's EPS grew by 31% and over the past three years, the total loss to shareholders 35%

In the past three years, the share price of Kendrion N.V. (AMS:KENDR) 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. These are some of the concerns that shareholders may want to bring up at the next AGM held on 15th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Kendrion

Comparing Kendrion N.V.'s CEO Compensation With The Industry

Our data indicates that Kendrion N.V. has a market capitalization of €213m, and total annual CEO compensation was reported as €952k for the year to December 2023. We note that's an increase of 16% above last year. Notably, the salary which is €553.3k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the the Netherlands Auto Components industry with market capitalizations ranging between €92m and €368m had a median total CEO compensation of €574k. Hence, we can conclude that Joep van Beurden is remunerated higher than the industry median. Furthermore, Joep van Beurden directly owns €850k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	€553k	€550k	58%
Other	€399k	€267k	42%
Total Compensation	€952k	€817k	100%

Talking in terms of the industry, salary represented approximately 48% of total compensation out of all the companies we analyzed, while other remuneration made up 52% of the pie. It's interesting to note that Kendrion pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Kendrion N.V.'s Growth

Kendrion N.V. has seen its earnings per share (EPS) increase by 31% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Kendrion N.V. Been A Good Investment?

The return of -35% over three years would not have pleased Kendrion N.V. shareholders. 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. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Kendrion that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.