Is Bachem Holding AG's (VTX:BANB) CEO Salary Justified?
Thomas Früh became the CEO of Bachem Holding AG (VTX:BANB) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Bachem Holding
How Does Thomas Früh's Compensation Compare With Similar Sized Companies?
Our data indicates that Bachem Holding AG is worth CHF2.0b, and total annual CEO compensation was reported as CHF559k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CHF280k. When we examined a selection of companies with market caps ranging from CHF992m to CHF3.2b, we found the median CEO total compensation was CHF1.2m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Bachem Holding has changed over time.
Is Bachem Holding AG Growing?
Over the last three years Bachem Holding AG has grown its earnings per share (EPS) by an average of 8.8% per year (using a line of best fit). It achieved revenue growth of 21% over the last year.
This revenue growth could really point to a brighter future. And the improvement in earnings per share is modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. It could be important to check this free visual depiction of what analysts expect for the future.
Has Bachem Holding AG Been A Good Investment?
I think that the total shareholder return of 95%, over three years, would leave most Bachem Holding AG shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Bachem Holding AG is currently paying its CEO below what is normal for companies of its size.
Thomas Früh is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. Whatever your view on compensation, you might want to check if insiders are buying or selling Bachem Holding shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.
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