We Think The Compensation For NN Group N.V.'s (AMS:NN) CEO Looks About Right

Key Insights

• NN Group to hold its Annual General Meeting on 15th of May
• CEO David Knibbe's total compensation includes salary of €2.04m
• The total compensation is similar to the average for the industry
• NN Group's EPS declined by 17% over the past three years while total shareholder return over the past three years was 48%

We've discovered 1 warning sign about NN Group. View them for free.

Despite strong share price growth of 48% for NN Group N.V. (AMS:NN) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 15th of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for NN Group

Comparing NN Group N.V.'s CEO Compensation With The Industry

According to our data, NN Group N.V. has a market capitalization of €15b, and paid its CEO total annual compensation worth €3.1m over the year to December 2024. That's a fairly small increase of 5.1% over the previous year. Notably, the salary which is €2.04m, represents most of the total compensation being paid.

On comparing similar companies in the the Netherlands Insurance industry with market capitalizations above €7.1b, we found that the median total CEO compensation was €4.1m. From this we gather that David Knibbe is paid around the median for CEOs in the industry. Moreover, David Knibbe also holds €3.6m worth of NN Group stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	€2.0m	€1.9m	67%
Other	€1.0m	€967k	33%
Total Compensation	€3.1m	€2.9m	100%

Talking in terms of the industry, salary represented approximately 40% of total compensation out of all the companies we analyzed, while other remuneration made up 60% of the pie. NN Group pays out 67% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at NN Group N.V.'s Growth Numbers

Over the last three years, NN Group N.V. has shrunk its earnings per share by 17% per year. It saw its revenue drop 4.2% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has NN Group N.V. Been A Good Investment?

Boasting a total shareholder return of 48% over three years, NN Group N.V. has done well by shareholders. 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...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for NN Group that you should be aware of before investing.

Important note: NN Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.