We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Krones AG's (ETR:KRN) CEO For Now

Key Insights

• Krones' Annual General Meeting to take place on 4th of June
• Salary of €880.0k is part of CEO Christoph Klenk's total remuneration
• The total compensation is 55% higher than the average for the industry
• Over the past three years, Krones' EPS grew by 63% and over the past three years, the total shareholder return was 66%

CEO Christoph Klenk has done a decent job of delivering relatively good performance at Krones AG (ETR:KRN) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 4th of June. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Krones

Comparing Krones AG's CEO Compensation With The Industry

At the time of writing, our data shows that Krones AG has a market capitalization of €4.0b, and reported total annual CEO compensation of €2.1m for the year to December 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €880k.

On comparing similar companies from the German Machinery industry with market caps ranging from €1.8b to €5.9b, we found that the median CEO total compensation was €1.4m. This suggests that Christoph Klenk is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€880k	€880k	42%
Other	€1.2m	€1.3m	58%
Total Compensation	€2.1m	€2.2m	100%

On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. It's interesting to note that Krones allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Krones AG's Growth

Over the past three years, Krones AG has seen its earnings per share (EPS) grow by 63% per year. It achieved revenue growth of 8.0% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Krones AG Been A Good Investment?

We think that the total shareholder return of 66%, over three years, would leave most Krones AG shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 1 warning sign for Krones that investors should think about before committing capital to this stock.

Switching gears from Krones, 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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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.