Yahoo Finance Is EnBW Energie Baden-Württemberg AG's (ETR:EBK) CEO Pay Fair?
In 2012, Frank Mastiaux was appointed CEO of EnBW Energie Baden-Württemberg AG (ETR:EBK). This analysis aims first to contrast CEO compensation with other large companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for EnBW Energie Baden-Württemberg
How Does Frank Mastiaux's Compensation Compare With Similar Sized Companies?
According to our data, EnBW Energie Baden-Württemberg AG has a market capitalization of €13b, and paid its CEO total annual compensation worth €3.3m over the year to December 2019. That's a fairly small increase of 1.7% on year before. While we always look at total compensation first, we note that the salary component is less, at €1.0m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over €7.4b, we found that their median CEO total compensation was €4.4m. (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).
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where EnBW Energie Baden-Württemberg stands. On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. It's interesting to note that EnBW Energie Baden-Württemberg allocates a smaller portion of compensation to salary in comparison to the broader industry.
So Frank Mastiaux is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. The graphic below shows how CEO compensation at EnBW Energie Baden-Württemberg has changed from year to year.
Is EnBW Energie Baden-Württemberg AG Growing?
Over the last three years EnBW Energie Baden-Württemberg AG has seen earnings per share (EPS) move in a positive direction by an average of 53% per year (using a line of best fit). In the last year, its revenue is down 9.6%.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has EnBW Energie Baden-Württemberg AG Been A Good Investment?
Boasting a total shareholder return of 121% over three years, EnBW Energie Baden-Württemberg AG has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Remuneration for Frank Mastiaux is close enough to the median pay for a CEO of a large company .
The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. On another note, EnBW Energie Baden-Württemberg has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
If you want to buy a stock that is better than EnBW Energie Baden-Württemberg, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
