Stefan Doboczky became the CEO of Lenzing Aktiengesellschaft (VIE:LNZ) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
How Does Stefan Doboczky's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Lenzing Aktiengesellschaft has a market cap of €1.3b, and reported total annual CEO compensation of €1.0m for the year to December 2019. That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €854k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of €920m to €2.9b. The median total CEO compensation was €1.5m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Lenzing stands. On an industry level, roughly 52% of total compensation represents salary and 48% is other remuneration. Lenzing pays out 85% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.
Most shareholders would consider it a positive that Stefan Doboczky takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business. You can see a visual representation of the CEO compensation at Lenzing, below.
Is Lenzing Aktiengesellschaft Growing?
Over the last three years Lenzing Aktiengesellschaft has shrunk its earnings per share by an average of 27% per year (measured with a line of best fit). Its revenue is down 3.1% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Lenzing Aktiengesellschaft Been A Good Investment?
Since shareholders would have lost about 66% over three years, some Lenzing Aktiengesellschaft shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
It appears that Lenzing Aktiengesellschaft remunerates its CEO below most similar sized companies.
Stefan Doboczky is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. Taking a breather from CEO compensation, we've spotted 4 warning signs for Lenzing (of which 1 is potentially serious!) you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.