Share price Swiss Re AG (VTX: SREN) has been growing in the past few years, but there has been no gain in EPS, suggesting something is wrong. Some of these issues will be on the minds of shareholders as the AGM is held on April 16, 2021. It will also give them the opportunity to influence management through the exercise of their voting power on company decisions, including remuneration of the CEO and chief executive officer, which could affect the firm. future performance. Based on what we have collected, we believe that shareholders should be wary of increasing CEO remuneration until the company shows measurable improvement.
Check out our latest Swiss Re analysis
Comparison of the CEO compensation of Swiss Re AG with the industry
According to our records, Swiss Re AG has a market capitalization of CHF 27 billion and paid its CEO a total annual remuneration of US $ 6.9 million for the year to December 2020. It is noteworthy that this is 12% more than a year earlier. While this analysis focuses on total compensation, it is worth recognizing that the salary portion is lower and is estimated at $ 1.7 million.
Comparing peers in the industry with a market capitalization above CHF 7.4 billion, we found that the average CEO remuneration was US $ 3.3 million. Accordingly, our analysis shows Swiss Re AG pays Christian Mumenthaler north of the industry median. In addition, Christian Mumenthaler also owns CHF 7.8 million in Swiss Re directly under its own name, indicating that they have a significant personal stake in the company.
|Component||2020 g.||Dec 2019||Proportion (2020)|
|The salary||USD 1.7 million||USD 1.5 million||25%|
|Other||USD 5.2 million||USD 4.6 million||75%|
|Full compensation||USD 6.9 million||US $ 6.1 million||100%|
At the industry level, almost 39% of the total remuneration is wages and the remaining 61% is other remuneration. Swiss Re pays a modest share of the remuneration in wages compared to the broader industry. If the total compensation tends towards non-payroll payments, it means that the CEO’s pay is tied to the company’s performance.
Growth of Swiss Re AG
Over the past three years, Swiss Re AG has cut earnings per share by 85% per year. Its revenue was down 12% from the previous year.
Few shareholders will be happy to know that earnings per share have declined. And the fact that revenues are falling year after year may paint an ugly picture. It is difficult to argue that the company is operating at full capacity, so shareholders may be opposed to the high remuneration of the CEO. Looking ahead, you might want to check out this free visual report at analyst forecasts for the company’s future income.
Was Swiss Re AG a good investment?
With a total shareholder return of 18% over three years, Swiss Re AG shareholders will generally be reasonably satisfied. But they would probably prefer not to see CEO pay much higher than average.
While it is true that shareholders have had decent profits, it is hard not to notice the lack of profit growth, and this makes us doubt whether such profits will continue. At the upcoming AGM, shareholders will have the opportunity to discuss with the board any concerns, including those related to the CEO’s remuneration, and assess whether the board’s plan will improve future performance.
CEO compensation can have a huge impact on productivity, but that’s just one element. We did our research and found 2 warning signs for Swiss Re that investors should look to the future.
Of course, you can find fantastic investments by looking at a different set of stocks. So take a look at this is free list of interesting companies.
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