We Think Some Shareholders May Hesitate To Increase Commerzbank AG's (ETR:CBK) CEO Compensation

Key Insights

• Commerzbank will host its Annual General Meeting on 30th of April
• CEO Manfred Knof's total compensation includes salary of €1.92m
• Total compensation is 36% above industry average
• Commerzbank's total shareholder return over the past three years was 174% while its EPS grew by 109% over the past three years

Performance at Commerzbank AG (ETR:CBK) has been reasonably good and CEO Manfred Knof has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 30th of April. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Commerzbank

How Does Total Compensation For Manfred Knof Compare With Other Companies In The Industry?

Our data indicates that Commerzbank AG has a market capitalization of €16b, and total annual CEO compensation was reported as €3.7m for the year to December 2023. That's a notable increase of 21% on last year. Notably, the salary which is €1.92m, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Germany Banks industry with market capitalizations above €7.5b, reported a median total CEO compensation of €2.7m. Hence, we can conclude that Manfred Knof is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	€1.9m	€1.9m	53%
Other	€1.7m	€1.1m	47%
Total Compensation	€3.7m	€3.0m	100%

On an industry level, around 68% of total compensation represents salary and 32% is other remuneration. Commerzbank pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Commerzbank AG's Growth Numbers

Commerzbank AG has seen its earnings per share (EPS) increase by 109% a year over the past three years. Its revenue is up 14% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Commerzbank AG Been A Good Investment?

Most shareholders would probably be pleased with Commerzbank AG for providing a total return of 174% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Commerzbank that investors should look into moving forward.

Important note: Commerzbank 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.