Here's Why We Think Ringmetall SE's (ETR:HP3A) CEO Compensation Looks Fair for the time being

Key Insights

• Ringmetall will host its Annual General Meeting on 25th of June
• Total pay for CEO Christoph Petri includes €238.0k salary
• The total compensation is similar to the average for the industry
• Ringmetall's EPS grew by 35% over the past three years while total shareholder return over the past three years was 21%

Performance at Ringmetall SE (ETR:HP3A) has been reasonably good and CEO Christoph Petri has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 25th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

View our latest analysis for Ringmetall

How Does Total Compensation For Christoph Petri Compare With Other Companies In The Industry?

According to our data, Ringmetall SE has a market capitalization of €113m, and paid its CEO total annual compensation worth €566k over the year to December 2023. We note that's a decrease of 22% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €238k.

On comparing similar-sized companies in the German Machinery industry with market capitalizations below €186m, we found that the median total CEO compensation was €545k. So it looks like Ringmetall compensates Christoph Petri in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€238k	€238k	42%
Other	€328k	€488k	58%
Total Compensation	€566k	€726k	100%

Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. In Ringmetall's case, non-salary compensation represents a greater slice of total remuneration, 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.

Ringmetall SE's Growth

Over the past three years, Ringmetall SE has seen its earnings per share (EPS) grow by 35% per year. In the last year, its revenue is down 15%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Ringmetall SE Been A Good Investment?

Ringmetall SE has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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've identified 1 warning sign for Ringmetall that investors should be aware of in a dynamic business environment.

Important note: Ringmetall 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.

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

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.

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