Yahoo Finance Should Shareholders Reconsider Grenke AG's (ETR:GLJ) CEO Compensation Package?
Key Insights
Grenke will host its Annual General Meeting on 30th of April
Total pay for CEO Sebastian Hirsch includes €588.9k salary
Total compensation is similar to the industry average
Over the past three years, Grenke's EPS fell by 0.9% and over the past three years, the total loss to shareholders 34%
The results at Grenke AG (ETR:GLJ) have been quite disappointing recently and CEO Sebastian Hirsch bears some responsibility for this. At the upcoming AGM on 30th of April, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.
See our latest analysis for Grenke
How Does Total Compensation For Sebastian Hirsch Compare With Other Companies In The Industry?
According to our data, Grenke AG has a market capitalization of €1.0b, and paid its CEO total annual compensation worth €890k over the year to December 2023. We note that's an increase of 18% above last year. In particular, the salary of €588.9k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the German Diversified Financial industry with market capitalizations ranging from €374m to €1.5b, the reported median CEO total compensation was €1.2m. This suggests that Grenke remunerates its CEO largely in line with the industry average.
Component | 2023 | 2022 | Proportion (2023) |
Salary | €589k | €515k | 66% |
Other | €301k | €240k | 34% |
Total Compensation | €890k | €755k | 100% |
On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. According to our research, Grenke has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Grenke AG's Growth Numbers
Over the last three years, Grenke AG has not seen its earnings per share change much, though they have deteriorated slightly. Revenue was pretty flat on last year.
A lack of EPS improvement is not good to see. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Grenke AG Been A Good Investment?
The return of -34% over three years would not have pleased Grenke AG shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Grenke you should be aware of, and 1 of them is potentially serious.
Important note: Grenke is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
