In 2016 Stefan Oschmann was appointed CEO of MERCK Kommanditgesellschaft auf Aktien (FRA:MRK). 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.
How Does Stefan Oschmann’s Compensation Compare With Similar Sized Companies?
Our data indicates that MERCK Kommanditgesellschaft auf Aktien is worth €41b, and total annual CEO compensation is €8.0m. (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 €1.3m. When we examined a group of companies with market caps over €7.2b, we found that their 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.
It would therefore appear that MERCK Kommanditgesellschaft auf Aktien pays Stefan Oschmann 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. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at MERCK Kommanditgesellschaft auf Aktien has changed over time.
Is MERCK Kommanditgesellschaft auf Aktien Growing?
On average over the last three years, MERCK Kommanditgesellschaft auf Aktien has shrunk earnings per share by 4.8% each year (measured with a line of best fit). It achieved revenue growth of 6.9% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Has MERCK Kommanditgesellschaft auf Aktien Been A Good Investment?
With a total shareholder return of 3.6% over three years, MERCK Kommanditgesellschaft auf Aktien has done okay by shareholders. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by MERCK Kommanditgesellschaft auf Aktien, and compared it to remuneration at a group of other large companies. Our data suggests that it pays above the median CEO pay within that group.Earnings per share have not grown in three years, and the revenue growth fails to impress us.
And shareholder returns are decent but not great. So we think more research is needed, but we don’t think the CEO underpaid. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at MERCK Kommanditgesellschaft auf Aktien.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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