What Can We Make Of TKH Group's (AMS:TWEKA) CEO Compensation?

J. M. Van Der Lof has been the CEO of TKH Group N.V. (AMS:TWEKA) since 2001, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether TKH Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for TKH Group

Comparing TKH Group N.V.'s CEO Compensation With the industry

Our data indicates that TKH Group N.V. has a market capitalization of €1.4b, and total annual CEO compensation was reported as €1.3m for the year to December 2019. That's a notable decrease of 16% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €578k.

On examining similar-sized companies in the industry with market capitalizations between €850m and €2.7b, we discovered that the median CEO total compensation of that group was €517k. Accordingly, our analysis reveals that TKH Group N.V. pays J. M. Van Der Lof north of the industry median. What's more, J. M. Van Der Lof holds €4.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. TKH Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

TKH Group N.V.'s Growth

Over the last three years, TKH Group N.V. has shrunk its earnings per share by 15% per year. It saw its revenue drop 4.6% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has TKH Group N.V. Been A Good Investment?

Since shareholders would have lost about 33% over three years, some TKH Group N.V. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, J. M. is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for TKH Group that investors should think about before committing capital to this stock.

Switching gears from TKH Group, 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. 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.
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