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This article will reflect on the compensation paid to Oliver Bäte who has served as CEO of Allianz SE (ETR:ALV) since 2015. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Allianz
Comparing Allianz SE's CEO Compensation With the industry
According to our data, Allianz SE has a market capitalization of €73b, and paid its CEO total annual compensation worth €6.7m over the year to December 2019. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.7m.
For comparison, other companies in the industry with market capitalizations above €6.8b, reported a median total CEO compensation of €4.0m. Accordingly, our analysis reveals that Allianz SE pays Oliver Bäte north of the industry median. Moreover, Oliver Bäte also holds €1.0m worth of Allianz stock directly under their own name.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | €1.7m | €1.3m | 26% |
| Other | €5.0m | €5.6m | 74% |
| Total Compensation | €6.7m | €6.9m | 100% |
On an industry level, around 35% of total compensation represents salary and 65% is other remuneration. Allianz pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Allianz SE's Growth Numbers
Allianz SE's earnings per share (EPS) grew 6.9% per year over the last three years. Its revenue is up 4.7% over the last year.
We'd prefer higher revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Allianz SE Been A Good Investment?
Allianz SE has served shareholders reasonably well, with a total return of 11% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
As we noted earlier, Allianz pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company lacks earnings per share growth, and returns to shareholders are less than stellar, over the last three years. We'd stop short of saying CEO pay is inappropriate, but we'd like to see healthier business growth from the company, moving forward.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Allianz that investors should look into moving forward.
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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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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
About XTRA:ALV
Allianz
Provides property-casualty insurance, life/health insurance, and asset management products and services worldwide.
Excellent balance sheet established dividend payer.
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