What Can We Make Of Holland Colours' (AMS:HOLCO) CEO Compensation?

Coen Vinke became the CEO of Holland Colours N.V. (AMS:HOLCO) in 2018, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Holland Colours

How Does Total Compensation For Coen Vinke Compare With Other Companies In The Industry?

Our data indicates that Holland Colours N.V. has a market capitalization of €100m, and total annual CEO compensation was reported as €456k for the year to March 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of €326.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below €165m, we found that the median total CEO compensation was €249k. Hence, we can conclude that Coen Vinke is remunerated higher than the industry median.

Talking in terms of the industry, salary represented approximately 33% of total compensation out of all the companies we analyzed, while other remuneration made up 67% of the pie. It's interesting to note that Holland Colours 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.

A Look at Holland Colours N.V.'s Growth Numbers

Holland Colours N.V.'s earnings per share (EPS) grew 9.4% per year over the last three years. Revenue was pretty flat on last year.

We'd prefer higher revenue growth, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Holland Colours N.V. Been A Good Investment?

Boasting a total shareholder return of 45% over three years, Holland Colours N.V. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we touched on above, Holland Colours N.V. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But shareholder returns have been positive for the last three years. That's why we were hoping EPS growth would match this growth, but sadly that is not the case. So, although we would've liked to see stronger EPS growth, positive investor returns lead us to believe CEO compensation is reasonable.

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 1 warning sign for Holland Colours that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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