What Can We Make Of Heidelberger Druckmaschinen's (ETR:HDD) CEO Compensation?

Rainer Hundsdörfer has been the CEO of Heidelberger Druckmaschinen Aktiengesellschaft (ETR:HDD) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Heidelberger Druckmaschinen

How Does Total Compensation For Rainer Hundsdörfer Compare With Other Companies In The Industry?

At the time of writing, our data shows that Heidelberger Druckmaschinen Aktiengesellschaft has a market capitalization of €424m, and reported total annual CEO compensation of €2.0m for the year to March 2020. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €670k.

On examining similar-sized companies in the industry with market capitalizations between €165m and €660m, we discovered that the median CEO total compensation of that group was €567k. This suggests that Rainer Hundsdörfer is paid more than the median for the industry.

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. It's interesting to note that Heidelberger Druckmaschinen allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Heidelberger Druckmaschinen Aktiengesellschaft's Growth

Over the last three years, Heidelberger Druckmaschinen Aktiengesellschaft has shrunk its earnings per share by 124% per year. It saw its revenue drop 21% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Heidelberger Druckmaschinen Aktiengesellschaft Been A Good Investment?

With a three year total loss of 51% for the shareholders, Heidelberger Druckmaschinen Aktiengesellschaft would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Rainer is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Heidelberger Druckmaschinen that investors should think about before committing capital to this stock.

Switching gears from Heidelberger Druckmaschinen, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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