Is ORIOR AG's (VTX:ORON) CEO Pay Justified?
In 2014 Daniel Lutz was appointed CEO of ORIOR AG (VTX:ORON). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for ORIOR
How Does Daniel Lutz's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that ORIOR AG has a market cap of CHF577m, and reported total annual CEO compensation of CHF979k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CHF430k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CHF194m to CHF774m. The median total CEO compensation was CHF964k.
That means Daniel Lutz receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at ORIOR has changed from year to year.
Is ORIOR AG Growing?
ORIOR AG saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. In the last year, its revenue is up 5.1%.
The lack of earnings per share growth in the last three years is unimpressive. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has ORIOR AG Been A Good Investment?
With a total shareholder return of 22% over three years, ORIOR AG shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
Remuneration for Daniel Lutz is close enough to the median pay for a CEO of a similar sized company .
The company isn't growing earnings per share, and nor have the total returns inspired us. We wouldn't say the CEO pay is too high, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ORIOR (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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