Yahoo Finance Should Shareholders Reconsider Signify N.V.'s (AMS:LIGHT) CEO Compensation Package?
Key Insights
Signify to hold its Annual General Meeting on 14th of May
CEO Eric H. Rondolat's total compensation includes salary of €985.2k
Total compensation is similar to the industry average
Signify's three-year loss to shareholders was 37% while its EPS was down 14% over the past three years
The results at Signify N.V. (AMS:LIGHT) have been quite disappointing recently and CEO Eric H. Rondolat bears some responsibility for this. At the upcoming AGM on 14th of May, 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Signify
How Does Total Compensation For Eric H. Rondolat Compare With Other Companies In The Industry?
Our data indicates that Signify N.V. has a market capitalization of €3.4b, and total annual CEO compensation was reported as €2.3m for the year to December 2023. That's a notable increase of 12% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €985k.
On comparing similar companies from the the Netherlands Electrical industry with market caps ranging from €1.9b to €6.0b, we found that the median CEO total compensation was €1.9m. From this we gather that Eric H. Rondolat is paid around the median for CEOs in the industry. Furthermore, Eric H. Rondolat directly owns €7.1m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | €985k | €947k | 43% |
Other | €1.3m | €1.1m | 57% |
Total Compensation | €2.3m | €2.0m | 100% |
On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. It's interesting to note that Signify allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Signify N.V.'s Growth Numbers
Over the last three years, Signify N.V. has shrunk its earnings per share by 14% per year. Its revenue is down 12% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Signify N.V. Been A Good Investment?
The return of -37% over three years would not have pleased Signify N.V. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Signify that investors should think about before committing capital to this stock.
Switching gears from Signify, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
