Stephan Sturm has been the CEO of Fresenius SE & Co. KGaA (ETR:FRE) since 2016. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Stephan Sturm's Compensation Compare With Similar Sized Companies?
Our data indicates that Fresenius SE & Co. KGaA is worth €27b, and total annual CEO compensation was reported as €6.0m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €1.1m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over €7.3b and the median CEO total compensation was €4.2m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
It would therefore appear that Fresenius SE & Co. KGaA pays Stephan Sturm more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration 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.
You can see, below, how CEO compensation at Fresenius SE KGaA has changed over time.
Is Fresenius SE & Co. KGaA Growing?
Fresenius SE & Co. KGaA has increased its earnings per share (EPS) by an average of 8.0% a year, over the last three years (using a line of best fit). Its revenue is up 4.6% over last year.
I'd prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing. It could be important to check this free visual depiction of what analysts expect for the future.
Has Fresenius SE & Co. KGaA Been A Good Investment?
Since shareholders would have lost about 25% over three years, some Fresenius SE & Co. KGaA shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Fresenius SE & Co. KGaA with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Whatever your view on compensation, you might want to check if insiders are buying or selling Fresenius SE KGaA shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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