Yahoo Finance Shareholders May Be A Bit More Conservative With VP Bank AG's (VTX:VPBN) CEO Compensation For Now
Key Insights
VP Bank to hold its Annual General Meeting on 26th of April
Salary of CHF700.0k is part of CEO Paul Arni's total remuneration
Total compensation is similar to the industry average
VP Bank's EPS grew by 1.3% over the past three years while total shareholder loss over the past three years was 5.3%
As many shareholders of VP Bank AG (VTX:VPBN) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 26th of April. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
See our latest analysis for VP Bank
Comparing VP Bank AG's CEO Compensation With The Industry
At the time of writing, our data shows that VP Bank AG has a market capitalization of CHF597m, and reported total annual CEO compensation of CHF1.3m for the year to December 2023. That's a slight decrease of 4.0% on the prior year. Notably, the salary which is CHF700.0k, represents a considerable chunk of the total compensation being paid.
For comparison, other companies in the Swiss Capital Markets industry with market capitalizations ranging between CHF364m and CHF1.5b had a median total CEO compensation of CHF1.4m. So it looks like VP Bank compensates Paul Arni in line with the median for the industry.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CHF700k | CHF700k | 53% |
Other | CHF609k | CHF663k | 47% |
Total Compensation | CHF1.3m | CHF1.4m | 100% |
On an industry level, roughly 44% of total compensation represents salary and 56% is other remuneration. VP Bank is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at VP Bank AG's Growth Numbers
VP Bank AG has seen its earnings per share (EPS) increase by 1.3% a year over the past three years. It achieved revenue growth of 6.1% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has VP Bank AG Been A Good Investment?
With a three year total loss of 5.3% for the shareholders, VP Bank AG would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for VP Bank that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.
