Yahoo Finance It's Unlikely That Swiss Re AG's (VTX:SREN) CEO Will See A Huge Pay Rise This Year
Key Insights
Swiss Re to hold its Annual General Meeting on 12th of April
Salary of US$1.62m is part of CEO Christian Mumenthaler's total remuneration
The total compensation is 38% higher than the average for the industry
Swiss Re's total shareholder return over the past three years was 52% while its EPS was down 13% over the past three years
Despite strong share price growth of 52% for Swiss Re AG (VTX:SREN) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 12th of April. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
See our latest analysis for Swiss Re
Comparing Swiss Re AG's CEO Compensation With The Industry
Our data indicates that Swiss Re AG has a market capitalization of CHF27b, and total annual CEO compensation was reported as US$6.7m for the year to December 2022. We note that's a decrease of 14% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.6m.
On comparing similar companies in the Swiss Insurance industry with market capitalizations above CHF7.2b, we found that the median total CEO compensation was US$4.8m. Accordingly, our analysis reveals that Swiss Re AG pays Christian Mumenthaler north of the industry median. Moreover, Christian Mumenthaler also holds CHF8.9m worth of Swiss Re stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$1.6m | US$1.6m | 24% |
Other | US$5.1m | US$6.2m | 76% |
Total Compensation | US$6.7m | US$7.8m | 100% |
Speaking on an industry level, nearly 38% of total compensation represents salary, while the remainder of 62% is other remuneration. Swiss Re pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Swiss Re AG's Growth Numbers
Over the last three years, Swiss Re AG has shrunk its earnings per share by 13% per year. Its revenue is down 1.6% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Swiss Re AG Been A Good Investment?
Most shareholders would probably be pleased with Swiss Re AG for providing a total return of 52% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Swiss Re that you should be aware of before investing.
Switching gears from Swiss Re, 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.
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