Should Shareholders Worry About Nordex SE's (ETR:NDX1) CEO Compensation Package?

Key Insights

• Nordex's Annual General Meeting to take place on 23rd of April
• Salary of €660.0k is part of CEO Jose Blanco Diéguez's total remuneration
• Total compensation is 37% below industry average
• Over the past three years, Nordex's EPS fell by 25% and over the past three years, the total loss to shareholders 38%

Performance at Nordex SE (ETR:NDX1) has not been particularly rosy recently and shareholders will likely be holding CEO Jose Blanco Diéguez and the board accountable for this. The next AGM coming up on 23rd of April will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for Nordex

How Does Total Compensation For Jose Blanco Diéguez Compare With Other Companies In The Industry?

Our data indicates that Nordex SE has a market capitalization of €2.9b, and total annual CEO compensation was reported as €1.2m for the year to December 2023. That's a notable decrease of 15% on last year. Notably, the salary which is €660.0k, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the German Electrical industry with market capitalizations ranging from €1.9b to €6.0b, the reported median CEO total compensation was €1.9m. That is to say, Jose Blanco Diéguez is paid under the industry median.

Component	2023	2022	Proportion (2023)
Salary	€660k	€610k	55%
Other	€543k	€813k	45%
Total Compensation	€1.2m	€1.4m	100%

On an industry level, roughly 41% of total compensation represents salary and 59% is other remuneration. Nordex pays out 55% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Nordex SE's Growth Numbers

Over the last three years, Nordex SE has shrunk its earnings per share by 25% per year. It achieved revenue growth of 14% over the last year.

Overall this is not a very positive result for shareholders. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Nordex SE Been A Good Investment?

Few Nordex SE shareholders would feel satisfied with the return of -38% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 Nordex that you should be aware of before investing.

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.

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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.