Stock Analysis

What Did ElringKlinger AG's (ETR:ZIL2) CEO Take Home Last Year?

  •  Updated
XTRA:ZIL2
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In 2006 Stefan Wolf was appointed CEO of ElringKlinger AG (ETR:ZIL2). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for ElringKlinger

How Does Stefan Wolf's Compensation Compare With Similar Sized Companies?

Our data indicates that ElringKlinger AG is worth €405m, and total annual CEO compensation was reported as €1.9m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €558k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from €182m to €727m, and discovered that the median CEO total compensation of that group was €745k.

Thus we can conclude that Stefan Wolf receives more in total compensation than the median of a group of companies in the same market, and of similar size to ElringKlinger AG. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at ElringKlinger has changed from year to year.

XTRA:ZIL2 CEO Compensation, January 30th 2020
XTRA:ZIL2 CEO Compensation, January 30th 2020

Is ElringKlinger AG Growing?

On average over the last three years, ElringKlinger AG has shrunk earnings per share by 53% each year (measured with a line of best fit). In the last year, its revenue is up 3.1%.

Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has ElringKlinger AG Been A Good Investment?

With a three year total loss of 59%, ElringKlinger AG would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by ElringKlinger AG, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at ElringKlinger.

Important note: ElringKlinger may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

About XTRA:ZIL2

ElringKlinger

ElringKlinger AG develops, manufactures, and sells systems and components for the automotive industry in Germany, the Asia-Pacific, North America, rest of Europe, and internationally.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation4
Future Growth4
Past Performance0
Financial Health5
Dividends1

Read more about these checks in the individual report sections or in our analysis model.

Excellent balance sheet and good value.