Here's Why Shareholders May Want To Be Cautious With Increasing DEUTZ Aktiengesellschaft's (ETR:DEZ) CEO Pay Packet

Key Insights

• DEUTZ's Annual General Meeting to take place on 8th of May
• Total pay for CEO Sebastian Schulte includes €850.0k salary
• The total compensation is similar to the average for the industry
• DEUTZ's EPS grew by 95% over the past three years while total shareholder loss over the past three years was 15%

In the past three years, the share price of DEUTZ Aktiengesellschaft (ETR:DEZ) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 8th of May could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for DEUTZ

How Does Total Compensation For Sebastian Schulte Compare With Other Companies In The Industry?

According to our data, DEUTZ Aktiengesellschaft has a market capitalization of €688m, and paid its CEO total annual compensation worth €1.6m over the year to December 2023. That's just a smallish increase of 7.8% on last year. In particular, the salary of €850.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the German Machinery industry with market capitalizations between €375m and €1.5b, we discovered that the median CEO total compensation of that group was €1.8m. This suggests that DEUTZ remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	€850k	€818k	54%
Other	€718k	€637k	46%
Total Compensation	€1.6m	€1.5m	100%

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. Our data reveals that DEUTZ allocates salary more or less in line with the wider market. 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.

DEUTZ Aktiengesellschaft's Growth

DEUTZ Aktiengesellschaft has seen its earnings per share (EPS) increase by 95% a year over the past three years. It achieved revenue growth of 9.0% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. 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 DEUTZ Aktiengesellschaft Been A Good Investment?

Given the total shareholder loss of 15% over three years, many shareholders in DEUTZ Aktiengesellschaft are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for DEUTZ that you should be aware of before investing.

Important note: DEUTZ 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.