In 2016, Christian Mumenthaler was appointed CEO of Swiss Re AG (VTX: SREN). This report will first examine CEO compensation levels compared to CEO compensation in other large companies. Next, we’ll take a snapshot of the company’s growth. Third, we will think about total return to shareholders over three years, as a second measure of business performance. This process should give us an idea of how well the CEO is paid.
Check out our latest analysis for Swiss Re
How does Christian Mumenthaler’s compensation compare to that of companies of similar size?
At the time of writing, our data indicates that Swiss Re AG has a market capitalization of CHF 22 billion and has declared a total annual compensation of the CEO of CHF 5.9 million for the year until December 2019 This represents a slight increase of 2.0% over the previous year. We think total compensation is more important, but we note that the CEO’s salary is lower, at CHF 1.5 million. We also remind readers that the CEO may be subject to performance requirements to receive the non-salary portion of the total compensation. When we looked at a group of companies with market capitalizations over CHF 7.8 billion, we found that the median total compensation for their CEOs was CHF 6.1 million. (We took a wide range because CEOs of massive companies tend to be paid similar amounts – even if some are a little bigger than others).
Now let’s take a look at the composition of compensation at industry and company level to better understand where Swiss Re is at. At industry level, around 39% of total compensation represents salary and 61% other remuneration. Swiss Re reserves a smaller part of the salary remuneration compared to the whole industry.
Christian Mumenthaler is therefore paid around the average of the companies we examined. While this fact alone does not tell us much, it becomes more relevant when viewed in relation to business performance. You can see below how the compensation of CEOs of Swiss Re has changed over time.
Is Swiss Re AG growing?
On average over the past three years, Swiss Re AG has reduced earnings per share by 80% each year (measured with a line of best fit). Last year, its turnover increased by 33%.
Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a future potential for earnings growth. These two measures are moving in different directions, so while it’s difficult to be confident to judge performance, we think the title is worth watching. It might be important to check out this free visual representation of what analysts expect for the future.
Was Swiss Re AG a good investment?
Given the total loss of 0.7% over three years, many shareholders of Swiss Re AG are probably quite unhappy. It could therefore be overwhelming for shareholders if the CEO was paid generously.
Christian Mumenthaler is paid almost like most CEOs of large companies.
The company cannot boast of particularly strong growth per share. And we think shareholder returns – over three years – have been disappointing. Many believe that the CEO is certainly not underpaid. On another note, we spotted 2 warning signs for Swiss Re that investors should consider moving forward.
If you want to buy a better stock than Swiss Re, this free The list of high-yield, low-debt companies is a great place to look.
If you spot an error that merits correction, please contact the publisher at [email protected] This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell securities and does not take into account your objectives or your financial situation. Simply Wall St has no position in the stocks mentioned.
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