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Is PostNL N.V. (AMS:PNL) Excessively Paying Its CEO?

Simply Wall St
·3 min read

In 2012, Herna Verhagen was appointed CEO of PostNL N.V. (AMS:PNL). 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 PostNL

How Does Herna Verhagen's Compensation Compare With Similar Sized Companies?

Our data indicates that PostNL N.V. is worth €659m, and total annual CEO compensation was reported as €1.1m for the year to December 2019. That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €625k. We examined companies with market caps from €368m to €1.5b, and discovered that the median CEO total compensation of that group was €1.1m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of PostNL. On a sector level, around 65% of total compensation represents salary and 35% is other remuneration. Our data reveals that PostNL allocates salary in line with the wider market.

That means Herna Verhagen receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. The graphic below shows how CEO compensation at PostNL has changed from year to year.

ENXTAM:PNL CEO Compensation May 13th 2020
ENXTAM:PNL CEO Compensation May 13th 2020

Is PostNL N.V. Growing?

PostNL N.V. has reduced its earnings per share by an average of 34% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 2.8% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has PostNL N.V. Been A Good Investment?

Since shareholders would have lost about 63% over three years, some PostNL N.V. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Herna Verhagen is paid around what is normal for the leaders of comparable size companies.

Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it's wise for the company to pay any more, before returns improve. On another note, we've spotted 5 warning signs for PostNL that investors should look into moving forward.

If you want to buy a stock that is better than PostNL, this free list of high return, low debt companies is a great place to look.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.