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Here's Why Shareholders Should Examine HORNBACH Holding AG & Co. KGaA's (ETR:HBH) CEO Compensation Package More Closely

Key Insights

Shareholders will probably not be too impressed with the underwhelming results at HORNBACH Holding AG & Co. KGaA (ETR:HBH) recently. At the upcoming AGM on 5th of July, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for HORNBACH Holding KGaA

How Does Total Compensation For Albrecht Hornbach Compare With Other Companies In The Industry?

Our data indicates that HORNBACH Holding AG & Co. KGaA has a market capitalization of €1.3b, and total annual CEO compensation was reported as €1.5m for the year to February 2024. Notably, that's an increase of 58% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €480k.

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In comparison with other companies in the German Specialty Retail industry with market capitalizations ranging from €934m to €3.0b, the reported median CEO total compensation was €1.5m. This suggests that HORNBACH Holding KGaA remunerates its CEO largely in line with the industry average. What's more, Albrecht Hornbach holds €8.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2024

2023

Proportion (2024)

Salary

€480k

€480k

33%

Other

€976k

€445k

67%

Total Compensation

€1.5m

€925k

100%

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. In HORNBACH Holding KGaA's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

HORNBACH Holding AG & Co. KGaA's Growth

Over the last three years, HORNBACH Holding AG & Co. KGaA has shrunk its earnings per share by 1.6% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

A lack of EPS improvement is not good to see. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has HORNBACH Holding AG & Co. KGaA Been A Good Investment?

With a three year total loss of 10% for the shareholders, HORNBACH Holding AG & Co. KGaA would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in 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. We've identified 1 warning sign for HORNBACH Holding KGaA that investors should be aware of in a dynamic business environment.

Switching gears from HORNBACH Holding KGaA, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com