In 2008 Urs Riedener was appointed CEO of Emmi AG (VTX:EMMN). 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Emmi
How Does Urs Riedener's Compensation Compare With Similar Sized Companies?
According to our data, Emmi AG has a market capitalization of CHF4.4b, and pays its CEO total annual compensation worth CHF1.5m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at CHF867k. We looked at a group of companies with market capitalizations from CHF2.0b to CHF6.4b, and the median CEO total compensation was CHF1.6m.
So Urs Riedener is paid around the average of 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 a visual representation of the CEO compensation at Emmi, below.
Is Emmi AG Growing?
On average over the last three years, Emmi AG has grown earnings per share (EPS) by 18% each year (using a line of best fit). Revenue was pretty flat on last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has Emmi AG Been A Good Investment?
With a total shareholder return of 29% over three years, Emmi AG shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Urs Riedener is paid around what is normal the leaders of comparable size companies.
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think the CEO pay is probably quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Emmi shares (free trial).
Important note: Emmi 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.
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