We Think Krka, d. d.'s (LJSE:KRKG) CEO Compensation Looks Fair

Key Insights

• Krka d. d's Annual General Meeting to take place on 10th of July
• Total pay for CEO Jože Colaric includes €582.0k salary
• Total compensation is similar to the industry average
• Krka d. d's EPS grew by 10% over the past three years while total shareholder return over the past three years was 142%

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It would be hard to discount the role that CEO Jože Colaric has played in delivering the impressive results at Krka, d. d. (LJSE:KRKG) recently. Coming up to the next AGM on 10th of July, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Krka d. d

Comparing Krka, d. d.'s CEO Compensation With The Industry

According to our data, Krka, d. d. has a market capitalization of €5.9b, and paid its CEO total annual compensation worth €1.6m over the year to December 2024. That's a notable increase of 14% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €582k.

In comparison with other companies in the Slovenia Pharmaceuticals industry with market capitalizations ranging from €3.4b to €10b, the reported median CEO total compensation was €1.6m. So it looks like Krka d. d compensates Jože Colaric in line with the median for the industry. What's more, Jože Colaric holds €4.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 51% of total compensation out of all the companies we analyzed, while other remuneration made up 49% of the pie. Krka d. d sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Krka, d. d.'s Growth

Krka, d. d. has seen its earnings per share (EPS) increase by 10% a year over the past three years. It achieved revenue growth of 6.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

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

Boasting a total shareholder return of 142% over three years, Krka, d. d. 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.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Krka d. d (free visualization of insider trades).

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.