Yahoo Finance Should You Worry About Kendrion N.V.'s (AMS:KENDR) CEO Salary Level?
In 2015 Joep van Beurden was appointed CEO of Kendrion N.V. (AMS:KENDR). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Kendrion
How Does Joep van Beurden's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Kendrion N.V. has a market cap of €144m, and reported total annual CEO compensation of €855k for the year to December 2019. Notably, that's an increase of 9.0% over the year before. While we always look at total compensation first, we note that the salary component is less, at €508k. We examined companies with market caps from €92m to €367m, and discovered that the median CEO total compensation of that group was €662k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. Kendrion is paying a higher share of its remuneration through a salary in comparison to the overall industry.
So Joep van Beurden receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at Kendrion has changed over time.
Is Kendrion N.V. Growing?
Kendrion N.V. has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 8.1%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Kendrion N.V. Been A Good Investment?
Given the total loss of 66% over three years, many shareholders in Kendrion N.V. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Joep van Beurden is paid around the same as most CEOs of similar size companies.
After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. This doesn't look great when you consider CEO remuneration is up on last year. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Moving away from CEO compensation for the moment, we've identified 3 warning signs for Kendrion that you should be aware of before investing.
Important note: Kendrion 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.
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