How Does ASR Nederland's (AMS:ASRNL) CEO Pay Compare With Company Performance?

By
Simply Wall St
Published
October 21, 2020
ENXTAM:ASRNL

Jos P. Baeten became the CEO of ASR Nederland N.V. (AMS:ASRNL) in 2009, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether ASR Nederland pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for ASR Nederland

Comparing ASR Nederland N.V.'s CEO Compensation With the industry

Our data indicates that ASR Nederland N.V. has a market capitalization of €3.9b, and total annual CEO compensation was reported as €1.1m for the year to December 2019. That's a notable increase of 20% on last year. We note that the salary portion, which stands at €752.0k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from €1.7b to €5.4b, we found that the median CEO total compensation was €2.1m. This suggests that Jos P. Baeten is paid below the industry median. Furthermore, Jos P. Baeten directly owns €119k worth of shares in the company.

Component20192018Proportion (2019)
Salary €752k €642k 66%
Other €393k €314k 34%
Total Compensation€1.1m €956k100%

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that ASR Nederland pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ENXTAM:ASRNL CEO Compensation October 21st 2020

ASR Nederland N.V.'s Growth

Over the last three years, ASR Nederland N.V. has shrunk its earnings per share by 1.3% per year. In the last year, its revenue is down 5.6%.

A lack of EPS improvement is not good to see. 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. 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?

Since shareholders would have lost about 3.4% over three years, some ASR Nederland N.V. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Jos P. is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. It's tough to say that Jos P. is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for ASR Nederland (1 is a bit concerning!) that you should be aware of before investing here.

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. 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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