Yahoo Finance Salzgitter AG's (ETR:SZG) CEO Will Probably Find It Hard To See A Huge Raise This Year
Key Insights
Salzgitter will host its Annual General Meeting on 29th of May
Total pay for CEO Gunnar Groebler includes €1.19m salary
The overall pay is comparable to the industry average
Salzgitter's EPS grew by 4.4% over the past three years while total shareholder loss over the past three years was 7.0%
In the past three years, the share price of Salzgitter AG (ETR:SZG) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 29th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Salzgitter
Comparing Salzgitter AG's CEO Compensation With The Industry
At the time of writing, our data shows that Salzgitter AG has a market capitalization of €1.2b, and reported total annual CEO compensation of €1.3m for the year to December 2023. We note that's a decrease of 29% compared to last year. We note that the salary portion, which stands at €1.19m constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the Germany Metals and Mining industry with market capitalizations ranging between €924m and €3.0b had a median total CEO compensation of €1.3m. This suggests that Salzgitter remunerates its CEO largely in line with the industry average.
Component | 2023 | 2022 | Proportion (2023) |
Salary | €1.2m | €1.1m | 89% |
Other | €144k | €744k | 11% |
Total Compensation | €1.3m | €1.9m | 100% |
On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. According to our research, Salzgitter has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Salzgitter AG's Growth Numbers
Salzgitter AG's earnings per share (EPS) grew 4.4% per year over the last three years. It saw its revenue drop 14% over the last year.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Salzgitter AG Been A Good Investment?
Since shareholders would have lost about 7.0% over three years, some Salzgitter AG investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
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 3 warning signs for Salzgitter that you should be aware of before investing.
Switching gears from Salzgitter, 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.
