Stefan Oschmann became the CEO of MERCK Kommanditgesellschaft auf Aktien (ETR:MRK) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Stefan Oschmann's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that MERCK Kommanditgesellschaft auf Aktien has a market cap of €51b, and reported total annual CEO compensation of €8.0m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €1.3m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations over €7.2b, and calculated the median CEO total compensation to be €4.0m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
Thus we can conclude that Stefan Oschmann receives more in total compensation than the median of a group of large companies in the same market as MERCK Kommanditgesellschaft auf Aktien. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at MERCK Kommanditgesellschaft auf Aktien has changed from year to year.
Is MERCK Kommanditgesellschaft auf Aktien Growing?
MERCK Kommanditgesellschaft auf Aktien has reduced its earnings per share by an average of 12% a year, over the last three years (measured with a line of best fit). Its revenue is up 7.3% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has MERCK Kommanditgesellschaft auf Aktien Been A Good Investment?
With a total shareholder return of 22% over three years, MERCK Kommanditgesellschaft auf Aktien shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by MERCK Kommanditgesellschaft auf Aktien, and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. And while shareholder returns have been respectable, they have hardly been superb. So we think more research is needed, but we don't think the CEO underpaid. Shareholders may want to check for free if MERCK Kommanditgesellschaft auf Aktien insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.