Increases to Krka, d. d.'s (LJSE:KRKG) CEO Compensation Might Cool off for now

CEO Jože Colaric has done a decent job of delivering relatively good performance at Krka, d. d. (LJSE:KRKG) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 08 July 2021. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Krka d. d

Comparing Krka, d. d.'s CEO Compensation With the industry

At the time of writing, our data shows that Krka, d. d. has a market capitalization of €3.2b, and reported total annual CEO compensation of €1.2m for the year to December 2020. That's a modest increase of 7.9% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at €432k.

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 €579k. Hence, we can conclude that Jože Colaric is remunerated higher than the industry median. What's more, Jože Colaric holds €2.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	€432k	€424k	35%
Other	€800k	€718k	65%
Total Compensation	€1.2m	€1.1m	100%

Speaking on an industry level, nearly 54% of total compensation represents salary, while the remainder of 46% is other remuneration. In Krka d. d's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Krka, d. d.'s Growth Numbers

Krka, d. d.'s earnings per share (EPS) grew 23% per year over the last three years. Its revenue is down 7.0% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Krka, d. d. Been A Good Investment?

Boasting a total shareholder return of 108% over three years, Krka, d. d. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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 Krka d. d 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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