We Discuss Why Dürr Aktiengesellschaft's (ETR:DUE) CEO Compensation May Be Closely Reviewed

Dürr Aktiengesellschaft (ETR:DUE) has not performed well recently and CEO Ralf Dieter will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 07 May 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Dürr

How Does Total Compensation For Ralf Dieter Compare With Other Companies In The Industry?

Our data indicates that Dürr Aktiengesellschaft has a market capitalization of €2.5b, and total annual CEO compensation was reported as €2.2m for the year to December 2020. We note that's a decrease of 33% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.0m.

On examining similar-sized companies in the industry with market capitalizations between €1.7b and €5.3b, we discovered that the median CEO total compensation of that group was €1.9m. So it looks like Dürr compensates Ralf Dieter in line with the median for the industry. Furthermore, Ralf Dieter directly owns €6.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	€1.0m	€1.0m	45%
Other	€1.2m	€2.3m	55%
Total Compensation	€2.2m	€3.3m	100%

On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. Our data reveals that Dürr allocates salary more or less in line with the wider market. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Dürr Aktiengesellschaft's Growth Numbers

Over the last three years, Dürr Aktiengesellschaft has shrunk its earnings per share by 44% per year. It saw its revenue drop 15% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Dürr Aktiengesellschaft Been A Good Investment?

Given the total shareholder loss of 10% over three years, many shareholders in Dürr Aktiengesellschaft are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 1 warning sign for Dürr that you should be aware of before investing.

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.

If you’re looking to trade Dürr, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.