Mercedes-Benz Group AG's (ETR:MBG) CEO Will Probably Have Their Compensation Approved By Shareholders

Key Insights

• Mercedes-Benz Group will host its Annual General Meeting on 8th of May
• CEO Ola Kallenius' total compensation includes salary of €1.77m
• Total compensation is similar to the industry average
• Mercedes-Benz Group's total shareholder return over the past three years was 36% while its EPS grew by 59% over the past three years

It would be hard to discount the role that CEO Ola Kallenius has played in delivering the impressive results at Mercedes-Benz Group AG (ETR:MBG) recently. Coming up to the next AGM on 8th of May, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Mercedes-Benz Group

How Does Total Compensation For Ola Kallenius Compare With Other Companies In The Industry?

At the time of writing, our data shows that Mercedes-Benz Group AG has a market capitalization of €73b, and reported total annual CEO compensation of €6.8m for the year to December 2023. Notably, that's an increase of 12% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.8m.

In comparison with other companies in the German Auto industry with market capitalizations over €7.5b, the reported median total CEO compensation was €6.8m. This suggests that Mercedes-Benz Group remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	€1.8m	€1.7m	26%
Other	€5.1m	€4.4m	74%
Total Compensation	€6.8m	€6.1m	100%

On an industry level, roughly 25% of total compensation represents salary and 75% is other remuneration. Our data reveals that Mercedes-Benz Group 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.

Mercedes-Benz Group AG's Growth

Mercedes-Benz Group AG's earnings per share (EPS) grew 59% per year over the last three years. In the last year, its revenue is up 2.1%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Mercedes-Benz Group AG Been A Good Investment?

Most shareholders would probably be pleased with Mercedes-Benz Group AG for providing a total return of 36% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Mercedes-Benz Group (of which 2 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: Mercedes-Benz 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. 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.