Shareholders Will Probably Be Cautious Of Increasing EDAG Engineering Group AG's (ETR:ED4) CEO Compensation At The Moment

Performance at EDAG Engineering Group AG (ETR:ED4) has not been particularly rosy recently and shareholders will likely be holding CEO Cosimo De Carlo and the board accountable for this. At the upcoming AGM on 23 June 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for EDAG Engineering Group

How Does Total Compensation For Cosimo De Carlo Compare With Other Companies In The Industry?

At the time of writing, our data shows that EDAG Engineering Group AG has a market capitalization of €220m, and reported total annual CEO compensation of €122k for the year to December 2020. We note that's a decrease of 12% compared to last year. Notably, the salary which is €107.0k, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between €82m and €330m, we discovered that the median CEO total compensation of that group was €418k. In other words, EDAG Engineering Group pays its CEO lower than the industry median. What's more, Cosimo De Carlo holds €53k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	€107k	€111k	88%
Other	€15k	€27k	12%
Total Compensation	€122k	€138k	100%

On an industry level, roughly 37% of total compensation represents salary and 63% is other remuneration. According to our research, EDAG Engineering Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at EDAG Engineering Group AG's Growth Numbers

EDAG Engineering Group AG has reduced its earnings per share by 95% a year over the last three years. It saw its revenue drop 20% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has EDAG Engineering Group AG Been A Good Investment?

With a total shareholder return of -48% over three years, EDAG Engineering Group AG shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for EDAG Engineering Group that investors should be aware of in a dynamic business environment.

Important note: EDAG Engineering Group 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. 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.
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