We Take A Look At Why RATIONAL Aktiengesellschaft's (ETR:RAA) CEO Has Earned Their Pay Packet

Key Insights

• RATIONAL's Annual General Meeting to take place on 14th of May
• CEO Peter Stadelmann's total compensation includes salary of €1.33m
• The overall pay is comparable to the industry average
• RATIONAL's EPS grew by 23% over the past three years while total shareholder return over the past three years was 46%

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The performance at RATIONAL Aktiengesellschaft (ETR:RAA) has been quite strong recently and CEO Peter Stadelmann has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 14th of May. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Check out our latest analysis for RATIONAL

Comparing RATIONAL Aktiengesellschaft's CEO Compensation With The Industry

Our data indicates that RATIONAL Aktiengesellschaft has a market capitalization of €8.5b, and total annual CEO compensation was reported as €2.4m for the year to December 2024. That's just a smallish increase of 5.0% on last year. We note that the salary of €1.33m makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the German Machinery industry with market capitalizations ranging between €3.5b and €11b had a median total CEO compensation of €2.4m. So it looks like RATIONAL compensates Peter Stadelmann in line with the median for the industry.

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. RATIONAL is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at RATIONAL Aktiengesellschaft's Growth Numbers

RATIONAL Aktiengesellschaft has seen its earnings per share (EPS) increase by 23% a year over the past three years. In the last year, its revenue is up 6.4%.

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 RATIONAL Aktiengesellschaft Been A Good Investment?

We think that the total shareholder return of 46%, over three years, would leave most RATIONAL Aktiengesellschaft shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for RATIONAL that investors should be aware of in a dynamic business environment.

Switching gears from RATIONAL, 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.