Here's Why Shareholders May Want To Be Cautious With Increasing JOST Werke SE's (ETR:JST) CEO Pay Packet

Key Insights

• JOST Werke's Annual General Meeting to take place on 8th of May
• Salary of €724.0k is part of CEO Joachim Durr's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, JOST Werke's EPS grew by 39% and over the past three years, the total loss to shareholders 12%

In the past three years, shareholders of JOST Werke SE (ETR:JST) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 8th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for JOST Werke

Comparing JOST Werke SE's CEO Compensation With The Industry

According to our data, JOST Werke SE has a market capitalization of €675m, and paid its CEO total annual compensation worth €1.8m over the year to December 2023. Notably, that's an increase of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €724k.

On comparing similar companies from the German Machinery industry with market caps ranging from €375m to €1.5b, we found that the median CEO total compensation was €1.8m. So it looks like JOST Werke compensates Joachim Durr in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€724k	€724k	41%
Other	€1.0m	€849k	59%
Total Compensation	€1.8m	€1.6m	100%

On an industry level, roughly 53% of total compensation represents salary and 47% is other remuneration. JOST Werke sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 JOST Werke SE's Growth Numbers

Over the past three years, JOST Werke SE has seen its earnings per share (EPS) grow by 39% per year. In the last year, its revenue is down 1.2%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 JOST Werke SE Been A Good Investment?

With a three year total loss of 12% for the shareholders, JOST Werke SE would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 3 warning signs for JOST Werke that investors should think about before committing capital to this stock.

Important note: JOST Werke 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.