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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Heidelberger Druckmaschinen.
View our latest analysis for Heidelberger Druckmaschinen
Comparing Heidelberger Druckmaschinen Aktiengesellschaft's CEO Compensation With the industry
According to our data, Heidelberger Druckmaschinen Aktiengesellschaft has a market capitalization of €176m, and paid its CEO total annual compensation worth €2.0m over the year to March 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €670k.
In comparison with other companies in the industry with market capitalizations ranging from €85m to €339m, the reported median CEO total compensation was €759k. This suggests that Rainer Hundsdörfer is paid more than the median for the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | €670k | €660k | 34% |
| Other | €1.3m | €1.3m | 66% |
| Total Compensation | €2.0m | €2.0m | 100% |
On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. It's interesting to note that Heidelberger Druckmaschinen allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Heidelberger Druckmaschinen Aktiengesellschaft's Growth Numbers
Over the last three years, Heidelberger Druckmaschinen Aktiengesellschaft has shrunk its earnings per share by 132% per year. In the last year, its revenue is down 11%.
Overall this is not a very positive result for shareholders. 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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Heidelberger Druckmaschinen Aktiengesellschaft Been A Good Investment?
With a three year total loss of 83% for the shareholders, Heidelberger Druckmaschinen Aktiengesellschaft would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, Heidelberger Druckmaschinen pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Heidelberger Druckmaschinen that investors should be aware of in a dynamic business environment.
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.
Promoted
If you decide to trade Heidelberger Druckmaschinen, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.
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@simplywallst.com.