This Is Why We Think PostNL N.V.'s (AMS:PNL) CEO Might Get A Pay Rise Approved By Shareholders

Shareholders will probably not be disappointed by the robust results at PostNL N.V. (AMS:PNL) recently and they will be keeping this in mind as they go into the AGM on 20 April 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

View our latest analysis for PostNL

Comparing PostNL N.V.'s CEO Compensation With the industry

Our data indicates that PostNL N.V. has a market capitalization of €2.1b, and total annual CEO compensation was reported as €1.2m for the year to December 2020. That's a notable increase of 13% on last year. We note that the salary of €640.6k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between €1.7b and €5.4b had a median total CEO compensation of €2.2m. Accordingly, PostNL pays its CEO under the industry median. Moreover, Herna Verhagen also holds €1.2m worth of PostNL stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	€641k	€625k	52%
Other	€596k	€470k	48%
Total Compensation	€1.2m	€1.1m	100%

On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. It's interesting to note that PostNL allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

PostNL N.V.'s Growth

PostNL N.V.'s earnings per share (EPS) grew 1.9% per year over the last three years. Its revenue is up 14% over the last year.

We think the revenue growth is good. And, while modest, the EPS growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. 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 PostNL N.V. Been A Good Investment?

Boasting a total shareholder return of 57% over three years, PostNL N.V. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 5 warning signs (and 2 which are a bit concerning) in PostNL we think you should know about.

Important note: PostNL 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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