We Think Some Shareholders May Hesitate To Increase DEUTZ Aktiengesellschaft's (ETR:DEZ) CEO Compensation

Key Insights

• DEUTZ's Annual General Meeting to take place on 8th of May
• CEO Sebastian Schulte's total compensation includes salary of €850.0k
• The overall pay is 106% above the industry average
• DEUTZ's EPS declined by 5.8% over the past three years while total shareholder return over the past three years was 73%

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The share price of DEUTZ Aktiengesellschaft (ETR:DEZ) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 8th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for DEUTZ

Comparing DEUTZ Aktiengesellschaft's CEO Compensation With The Industry

Our data indicates that DEUTZ Aktiengesellschaft has a market capitalization of €942m, and total annual CEO compensation was reported as €2.2m for the year to December 2024. That's a notable increase of 40% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €850k.

On comparing similar companies from the German Machinery industry with market caps ranging from €354m to €1.4b, we found that the median CEO total compensation was €1.1m. Accordingly, our analysis reveals that DEUTZ Aktiengesellschaft pays Sebastian Schulte north of the industry median.

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. Although there is a difference in how total compensation is set, DEUTZ more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

DEUTZ Aktiengesellschaft's Growth

Over the last three years, DEUTZ Aktiengesellschaft has shrunk its earnings per share by 5.8% per year. Its revenue is down 12% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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?

Boasting a total shareholder return of 73% over three years, DEUTZ Aktiengesellschaft has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for DEUTZ that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.