Shareholders May Be Wary Of Increasing Siemens Energy AG's (ETR:ENR) CEO Compensation Package

Key Insights

• Siemens Energy's Annual General Meeting to take place on 26th of February
• Total pay for CEO Christian Bruch includes €1.52m salary
• The total compensation is similar to the average for the industry
• Siemens Energy's three-year loss to shareholders was 56% while its EPS was down 47% over the past three years

The results at Siemens Energy AG (ETR:ENR) have been quite disappointing recently and CEO Christian Bruch bears some responsibility for this. At the upcoming AGM on 26th of February, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Siemens Energy

How Does Total Compensation For Christian Bruch Compare With Other Companies In The Industry?

Our data indicates that Siemens Energy AG has a market capitalization of €11b, and total annual CEO compensation was reported as €3.3m for the year to September 2023. That's slightly lower by 5.4% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.5m.

In comparison with other companies in the German Electrical industry with market capitalizations over €7.4b, the reported median total CEO compensation was €3.5m. So it looks like Siemens Energy compensates Christian Bruch in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€1.5m	€1.4m	45%
Other	€1.8m	€2.1m	55%
Total Compensation	€3.3m	€3.5m	100%

On an industry level, around 41% of total compensation represents salary and 59% is other remuneration. Siemens Energy pays out 45% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Siemens Energy AG's Growth

Siemens Energy AG has reduced its earnings per share by 47% a year over the last three years. Its revenue is up 5.3% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Siemens Energy AG Been A Good Investment?

The return of -56% over three years would not have pleased Siemens Energy AG shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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. We did our research and spotted 2 warning signs for Siemens Energy that investors should look into moving forward.

Important note: Siemens Energy 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.