Yahoo Finance How Should Investors Feel About 4SC AG's (ETR:VSC) CEO Pay?
Jason Loveridge has been the CEO of 4SC AG (ETR:VSC) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for 4SC
How Does Jason Loveridge's Compensation Compare With Similar Sized Companies?
Our data indicates that 4SC AG is worth €108m, and total annual CEO compensation was reported as €669k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €340k. We examined a group of similar sized companies, with market capitalizations of below €180m. The median CEO total compensation in that group is €195k.
It would therefore appear that 4SC AG pays Jason Loveridge more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at 4SC has changed from year to year.
Is 4SC AG Growing?
On average over the last three years, 4SC AG has grown earnings per share (EPS) by 4.1% each year (using a line of best fit). Its revenue is down 72% over last year.
I would prefer it if there was revenue growth, but I'm happy with the EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has 4SC AG Been A Good Investment?
Since shareholders would have lost about 1.7% over three years, some 4SC AG shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared the total CEO remuneration paid by 4SC AG, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. So you may want to check if insiders are buying 4SC shares with their own money (free access).
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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