Does dormakaba Holding AG's (VTX:DOKA) CEO Salary Reflect Performance?
In 2011 Riet Cadonau was appointed CEO of dormakaba Holding AG (VTX:DOKA). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for dormakaba Holding
How Does Riet Cadonau's Compensation Compare With Similar Sized Companies?
Our data indicates that dormakaba Holding AG is worth CHF2.6b, and total annual CEO compensation was reported as CHF3.8m for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at CHF832k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CHF2.0b to CHF6.3b. The median total CEO compensation was CHF1.4m.
Thus we can conclude that Riet Cadonau receives more in total compensation than the median of a group of companies in the same market, and of similar size to dormakaba Holding AG. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at dormakaba Holding, below.
Is dormakaba Holding AG Growing?
Over the last three years dormakaba Holding AG has grown its earnings per share (EPS) by an average of 24% per year (using a line of best fit). In the last year, its revenue changed by just 0.8%.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.
Has dormakaba Holding AG Been A Good Investment?
With a three year total loss of 18%, dormakaba Holding AG would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We examined the amount dormakaba Holding AG pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Shareholders may want to check for free if dormakaba Holding insiders are buying or selling shares.
Important note: dormakaba Holding may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
