Yahoo Finance We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Cancom SE's (ETR:COK) CEO For Now
Key Insights
Cancom will host its Annual General Meeting on 5th of June
Total pay for CEO Rudiger Rath includes €520.0k salary
Total compensation is 94% above industry average
Cancom's three-year loss to shareholders was 30% while its EPS grew by 4.2% over the past three years
Shareholders of Cancom SE (ETR:COK) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 5th of June 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. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Cancom
Comparing Cancom SE's CEO Compensation With The Industry
According to our data, Cancom SE has a market capitalization of €1.1b, and paid its CEO total annual compensation worth €859k over the year to December 2023. That's a notable increase of 68% on last year. We note that the salary portion, which stands at €520.0k constitutes the majority of total compensation received by the CEO.
On comparing similar companies from the German IT industry with market caps ranging from €370m to €1.5b, we found that the median CEO total compensation was €443k. Hence, we can conclude that Rudiger Rath is remunerated higher than the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | €520k | €399k | 61% |
Other | €339k | €112k | 39% |
Total Compensation | €859k | €511k | 100% |
On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. Cancom is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Cancom SE's Growth Numbers
Over the past three years, Cancom SE has seen its earnings per share (EPS) grow by 4.2% per year. It achieved revenue growth of 25% over the last year.
We like the look of the strong year-on-year improvement in revenue. Combined with modest EPS growth, we get a good impression of the company. We wouldn't say this is necessarily top notch growth, but it is certainly promising. 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 Cancom SE Been A Good Investment?
With a total shareholder return of -30% over three years, Cancom SE shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
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 probably be keen to find out what are the other factors could be weighing down the stock. 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.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Cancom that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.
