Shareholders May Not Be So Generous With Grammer AG's (ETR:GMM) CEO Compensation And Here's Why

Key Insights

• Grammer's Annual General Meeting to take place on 22nd of May
• Salary of €488.0k is part of CEO Jens Ohlenschlager's total remuneration
• Total compensation is 70% above industry average
• Over the past three years, Grammer's EPS grew by 6.7% and over the past three years, the total loss to shareholders 42%

We've discovered 1 warning sign about Grammer. View them for free.

Shareholders of Grammer AG (ETR:GMM) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 22nd of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Grammer

Comparing Grammer AG's CEO Compensation With The Industry

According to our data, Grammer AG has a market capitalization of €129m, and paid its CEO total annual compensation worth €649k over the year to December 2024. Notably, that's a decrease of 21% over the year before. In particular, the salary of €488.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the German Auto Components industry with market capitalizations below €179m, reported a median total CEO compensation of €382k. Hence, we can conclude that Jens Ohlenschlager is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	€488k	€488k	75%
Other	€161k	€330k	25%
Total Compensation	€649k	€818k	100%

Speaking on an industry level, nearly 36% of total compensation represents salary, while the remainder of 64% is other remuneration. Grammer pays out 75% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Grammer AG's Growth

Grammer AG has seen its earnings per share (EPS) increase by 6.7% a year over the past three years. Its revenue is down 16% over the previous year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Grammer AG Been A Good Investment?

With a total shareholder return of -42% over three years, Grammer AG shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Grammer that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.