We think KION GROUP AG's (ETR:KGX) CEO May Struggle To See Much Of A Pay Rise This Year
Key Insights
- KION GROUP to hold its Annual General Meeting on 27th of May
- CEO Rob Smith's total compensation includes salary of €1.20m
- The total compensation is similar to the average for the industry
- KION GROUP's total shareholder return over the past three years was 0.9% while its EPS was down 26% over the past three years
Share price growth at KION GROUP AG (ETR:KGX) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. Some of these issues will occupy shareholders' minds as the AGM rolls around on 27th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
See our latest analysis for KION GROUP
How Does Total Compensation For Rob Smith Compare With Other Companies In The Industry?
Our data indicates that KION GROUP AG has a market capitalization of €5.6b, and total annual CEO compensation was reported as €3.2m for the year to December 2024. That's a fairly small increase of 4.8% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.2m.
On examining similar-sized companies in the German Machinery industry with market capitalizations between €3.5b and €11b, we discovered that the median CEO total compensation of that group was €2.5m. So it looks like KION GROUP compensates Rob Smith in line with the median for the industry.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | €1.2m | €1.2m | 37% |
| Other | €2.0m | €1.9m | 63% |
| Total Compensation | €3.2m | €3.1m | 100% |
On an industry level, roughly 41% of total compensation represents salary and 59% is other remuneration. Although there is a difference in how total compensation is set, KION GROUP more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
KION GROUP AG's Growth
Over the last three years, KION GROUP AG has shrunk its earnings per share by 26% per year. In the last year, its revenue changed by just 0.7%.
The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 KION GROUP AG Been A Good Investment?
KION GROUP AG has not done too badly by shareholders, with a total return of 0.9%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.
To Conclude...
The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for KION GROUP you should be aware of, and 1 of them doesn't sit too well with us.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
Valuation is complex, but we're here to simplify it.
Discover if KION GROUP might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.