We Think The Compensation For Bayerische Motoren Werke Aktiengesellschaft's (ETR:BMW) CEO Looks About Right

Key Insights

• Bayerische Motoren Werke will host its Annual General Meeting on 14th of May
• Salary of €1.95m is part of CEO Oliver Zipse's total remuneration
• The overall pay is comparable to the industry average
• Bayerische Motoren Werke's total shareholder return over the past three years was 15% while its EPS was down 15% over the past three years

We've discovered 2 warning signs about Bayerische Motoren Werke. View them for free.

Despite Bayerische Motoren Werke Aktiengesellschaft's (ETR:BMW) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 14th of May. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for Bayerische Motoren Werke

How Does Total Compensation For Oliver Zipse Compare With Other Companies In The Industry?

According to our data, Bayerische Motoren Werke Aktiengesellschaft has a market capitalization of €47b, and paid its CEO total annual compensation worth €5.7m over the year to December 2024. We note that's a decrease of 36% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €2.0m.

On comparing similar companies in the German Auto industry with market capitalizations above €7.1b, we found that the median total CEO compensation was €7.8m. This suggests that Bayerische Motoren Werke remunerates its CEO largely in line with the industry average.

Component	2024	2023	Proportion (2024)
Salary	€2.0m	€2.0m	34%
Other	€3.7m	€6.9m	66%
Total Compensation	€5.7m	€8.9m	100%

Speaking on an industry level, nearly 33% of total compensation represents salary, while the remainder of 67% is other remuneration. Our data reveals that Bayerische Motoren Werke allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Bayerische Motoren Werke Aktiengesellschaft's Growth

Bayerische Motoren Werke Aktiengesellschaft has reduced its earnings per share by 15% a year over the last three years. It saw its revenue drop 8.4% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Bayerische Motoren Werke Aktiengesellschaft Been A Good Investment?

Bayerische Motoren Werke Aktiengesellschaft has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. 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.

In Summary...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Bayerische Motoren Werke (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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. 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.