Yahoo Finance How Should Investors React To Continental Aktiengesellschaft's (FRA:CON) CEO Pay?
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Elmar Degenhart became the CEO of Continental Aktiengesellschaft (FRA:CON) in 2009. This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Continental
How Does Elmar Degenhart's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Continental Aktiengesellschaft has a market cap of €24b, and is paying total annual CEO compensation of €6.7m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at €1.5m. We looked at a group of companies with market capitalizations over €7.1b and the median CEO total compensation was €4.3m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Thus we can conclude that Elmar Degenhart receives more in total compensation than the median of a group of large companies in the same market as Continental Aktiengesellschaft. 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 Continental has changed from year to year.
Is Continental Aktiengesellschaft Growing?
On average over the last three years, Continental Aktiengesellschaft has grown earnings per share (EPS) by 1.5% each year (using a line of best fit). Revenue was pretty flat on last year.
I'd prefer higher revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Shareholders might be interested in this free visualization of analyst forecasts.
Has Continental Aktiengesellschaft Been A Good Investment?
With a three year total loss of 27%, Continental Aktiengesellschaft would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We examined the amount Continental Aktiengesellschaft pays its CEO, and compared it to the amount paid by other large companies. Our data suggests that it pays above the median CEO pay within that group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling Continental shares (free trial).
If you want to buy a stock that is better than Continental, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.
