Is Geberit AG's (VTX:GEBN) CEO Salary Justified?
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Christian Buhl has been the CEO of Geberit AG (VTX:GEBN) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Geberit
How Does Christian Buhl's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Geberit AG has a market cap of CHF17b, and is paying total annual CEO compensation of CHF2.5m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CHF932k. We took a group of companies with market capitalizations over CHF7.9b, and calculated the median CEO total compensation to be CHF4.2m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
A first glance this seems like a real positive for shareholders, since Christian Buhl is paid less than the average total compensation paid by other large companies. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Geberit, below.
Is Geberit AG Growing?
Over the last three years Geberit AG has grown its earnings per share (EPS) by an average of 7.8% per year (using a line of best fit). It achieved revenue growth of 3.1% over the last year.
I would argue that the improvement in revenue isn't particularly impressive, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. It could be important to check this free visual depiction of what analysts expect for the future.
Has Geberit AG Been A Good Investment?
Most shareholders would probably be pleased with Geberit AG for providing a total return of 39% over three years. 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...
Geberit AG is currently paying its CEO below what is normal for large companies.
Christian Buhl receives relatively low remuneration compared to other large companies. And the returns to shareholders were great, over the last few years. Although we could see higher growth, we'd argue the remuneration is modest, based on these observations. Whatever your view on compensation, you might want to check if insiders are buying or selling Geberit shares (free trial).
Important note: Geberit 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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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. Thank you for reading.
