Armin Papperger has been the CEO of Rheinmetall AG (ETR:RHM) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Armin Papperger’s Compensation Compare With Similar Sized Companies?
According to our data, Rheinmetall AG has a market capitalization of €4.6b, and paid its CEO total annual compensation worth €5.7m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €1.2m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from €3.6b to €11b, and discovered that the median CEO total compensation of that group was €3.2m.
It would therefore appear that Rheinmetall AG pays Armin Papperger more than the median CEO remuneration at companies of a similar size, 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 a visual representation of the CEO compensation at Rheinmetall, below.
Is Rheinmetall AG Growing?
Over the last three years Rheinmetall AG has grown its earnings per share (EPS) by an average of 20% per year (using a line of best fit). It achieved revenue growth of 6.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Rheinmetall AG Been A Good Investment?
Most shareholders would probably be pleased with Rheinmetall AG for providing a total return of 61% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Rheinmetall AG pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Rheinmetall.
If you want to buy a stock that is better than Rheinmetall, this free list of high return, low debt companies is a great place to look.
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