In 2010 Karl-Heinz Strauss was appointed CEO of PORR AG (VIE:POS). 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Karl-Heinz Strauss’s Compensation Compare With Similar Sized Companies?
Our data indicates that PORR AG is worth €621m, and total annual CEO compensation is €1.4m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at €750k. We examined companies with market caps from €357m to €1.4b, and discovered that the median CEO total compensation of that group was €980k.
Thus we can conclude that Karl-Heinz Strauss receives more in total compensation than the median of a group of companies in the same market, and of similar size to PORR AG. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at PORR has changed from year to year.
Is PORR AG Growing?
Over the last three years, PORR AG has not seen its earnings per share change much, though they have deteriorated slightly, according to a line of best fit. In the last year, its revenue is up 25%.
The lack of earnings per share growth in the last three years is unimpressive. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has PORR AG Been A Good Investment?
Since shareholders would have lost about 3.7% over three years, some PORR AG shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount PORR AG pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at PORR.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.