Is Renk Aktiengesellschaft’s (FRA:ZAR) CEO Paid At A Competitive Rate?

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Florian Hofbauer has been the CEO of Renk Aktiengesellschaft (FRA:ZAR) since 2007. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Renk

How Does Florian Hofbauer’s Compensation Compare With Similar Sized Companies?

Our data indicates that Renk Aktiengesellschaft is worth €660m, and total annual CEO compensation is €842k. (This is based on the year to December 2018). That’s a notable increase of 64% on last year. While we always look at total compensation first, we note that the salary component is less, at €270k. We looked at a group of companies with market capitalizations from €357m to €1.4b, and the median CEO total compensation was €1.1m.

So Florian Hofbauer is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Renk, below.

DB:ZAR CEO Compensation, May 7th 2019
DB:ZAR CEO Compensation, May 7th 2019

Is Renk Aktiengesellschaft Growing?

Renk Aktiengesellschaft has reduced its earnings per share by an average of 1.9% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 7.0%.

Unfortunately there is a complete lack of earnings per share improvement, over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Renk Aktiengesellschaft Been A Good Investment?

Renk Aktiengesellschaft has generated a total shareholder return of 3.1% over three years, so most shareholders wouldn’t be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

Florian Hofbauer is paid around what is normal the leaders of comparable size companies.

We feel that earnings per share have been a bit disappointing, but and we don’t think the total returns are amazing. We doubt shareholders are particularly happy to see that the CEO compensation increased on last year. We’re not saying the CEO pay is too generous, but we’d venture the company should look to improve its business metrics (and share price) before paying any more. So you may want to check if insiders are buying Renk shares with their own money (free access).

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

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.

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. Thank you for reading.