The share price of ASR Nederland N.V. (AMS:ASRNL) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 19 May 2021. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
Comparing ASR Nederland N.V.'s CEO Compensation With the industry
At the time of writing, our data shows that ASR Nederland N.V. has a market capitalization of €5.1b, and reported total annual CEO compensation of €1.4m for the year to December 2020. That's a notable increase of 24% on last year. Notably, the salary which is €811.0k, represents a considerable chunk of the total compensation being paid.
On comparing similar companies from the same industry with market caps ranging from €3.3b to €9.9b, we found that the median CEO total compensation was €1.8m. From this we gather that Jos P. Baeten is paid around the median for CEOs in the industry. What's more, Jos P. Baeten holds €199k worth of shares in the company in their own name.
Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. According to our research, ASR Nederland has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at ASR Nederland N.V.'s Growth Numbers
Over the last three years, ASR Nederland N.V. has shrunk its earnings per share by 9.9% per year. In the last year, its revenue is down 5.6%.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 ASR Nederland N.V. Been A Good Investment?
With a total shareholder return of 15% over three years, ASR Nederland N.V. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for ASR Nederland (1 can't be ignored!) that you should be aware of before investing here.
Important note: ASR Nederland 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. 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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