Here's Why Shareholders May Want To Be Cautious With Increasing PORR AG's (VIE:POS) CEO Pay Packet

Key Insights

• PORR's Annual General Meeting to take place on 30th of April
• Total pay for CEO Karl-Heinz Strauss includes €850.0k salary
• The total compensation is 36% higher than the average for the industry
• PORR's EPS grew by 91% over the past three years while total shareholder return over the past three years was 7.7%

Under the guidance of CEO Karl-Heinz Strauss, PORR AG (VIE:POS) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 30th of April. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for PORR

Comparing PORR AG's CEO Compensation With The Industry

Our data indicates that PORR AG has a market capitalization of €553m, and total annual CEO compensation was reported as €1.8m for the year to December 2023. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €850k.

In comparison with other companies in the Austria Construction industry with market capitalizations ranging from €187m to €747m, the reported median CEO total compensation was €1.3m. This suggests that Karl-Heinz Strauss is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€850k	€850k	48%
Other	€928k	€932k	52%
Total Compensation	€1.8m	€1.8m	100%

On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. Our data reveals that PORR allocates salary more or less in line with the wider market. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

PORR AG's Growth

PORR AG's earnings per share (EPS) grew 91% per year over the last three years. Its revenue is up 4.5% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has PORR AG Been A Good Investment?

PORR AG has not done too badly by shareholders, with a total return of 7.7%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for PORR that investors should look into moving forward.

Important note: PORR 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.