We Think PostNL N.V.'s (AMS:PNL) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• PostNL will host its Annual General Meeting on 15th of April
• CEO Herna Verhagen's total compensation includes salary of €724.5k
• The total compensation is 622% higher than the average for the industry
• Over the past three years, PostNL's EPS fell by 57% and over the past three years, the total loss to shareholders 64%

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The results at PostNL N.V. (AMS:PNL) have been quite disappointing recently and CEO Herna Verhagen bears some responsibility for this. At the upcoming AGM on 15th of April, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for PostNL

How Does Total Compensation For Herna Verhagen Compare With Other Companies In The Industry?

Our data indicates that PostNL N.V. has a market capitalization of €485m, and total annual CEO compensation was reported as €1.2m for the year to December 2024. That's a notable decrease of 14% on last year. Notably, the salary which is €724.5k, represents most of the total compensation being paid.

On comparing similar companies from the the Netherlands Logistics industry with market caps ranging from €183m to €732m, we found that the median CEO total compensation was €161k. This suggests that Herna Verhagen is paid more than the median for the industry. Furthermore, Herna Verhagen directly owns €470k worth of shares in the company.

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. PostNL is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

A Look at PostNL N.V.'s Growth Numbers

Over the last three years, PostNL N.V. has shrunk its earnings per share by 57% per year. It achieved revenue growth of 2.7% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. 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 PostNL N.V. Been A Good Investment?

The return of -64% over three years would not have pleased PostNL N.V. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for PostNL 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.