Here's Why Shareholders May Want To Be Cautious With Increasing Siemens Aktiengesellschaft's (ETR:SIE) CEO Pay Packet

Key Insights

• Siemens to hold its Annual General Meeting on 09 February 2023
• CEO Roland Busch's total compensation includes salary of €1.77m
• Total compensation is 58% above industry average
• Siemens' EPS grew by -6.6% over the past three years while total shareholder return over the past three years was 52%

CEO Roland Busch has done a decent job of delivering relatively good performance at Siemens Aktiengesellschaft (ETR:SIE) recently. As shareholders go into the upcoming AGM on 09 February 2023, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Siemens

How Does Total Compensation For Roland Busch Compare With Other Companies In The Industry?

Our data indicates that Siemens Aktiengesellschaft has a market capitalization of €113b, and total annual CEO compensation was reported as €7.6m for the year to September 2022. That's a fairly small increase of 8.0% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.8m.

For comparison, other companies in the Germany Industrials industry with market capitalizations above €7.3b, reported a median total CEO compensation of €4.8m. This suggests that Roland Busch is paid more than the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	€1.8m	€1.8m	23%
Other	€5.8m	€5.3m	77%
Total Compensation	€7.6m	€7.1m	100%

On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. It's interesting to note that Siemens allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Siemens Aktiengesellschaft's Growth Numbers

Siemens Aktiengesellschaft has reduced its earnings per share by 6.6% a year over the last three years. Its revenue is up 16% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Siemens Aktiengesellschaft Been A Good Investment?

Boasting a total shareholder return of 52% over three years, Siemens Aktiengesellschaft has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Although the company has performed relatively well, we still think there are some areas that could be improved. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 4 warning signs for Siemens that you should be aware of before investing.

Switching gears from Siemens, 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.