We Think Some Shareholders May Hesitate To Increase Koenig & Bauer AG's (ETR:SKB) CEO Compensation

Key Insights

• Koenig & Bauer's Annual General Meeting to take place on 26th of June
• CEO Andreas Pleßke's total compensation includes salary of €600.0k
• Total compensation is 48% above industry average
• Koenig & Bauer's EPS grew by 105% over the past three years while total shareholder loss over the past three years was 51%

The underwhelming share price performance of Koenig & Bauer AG (ETR:SKB) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 26th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Koenig & Bauer

How Does Total Compensation For Andreas Pleßke Compare With Other Companies In The Industry?

At the time of writing, our data shows that Koenig & Bauer AG has a market capitalization of €222m, and reported total annual CEO compensation of €926k for the year to December 2023. Notably, that's a decrease of 17% over the year before. We note that the salary portion, which stands at €600.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the German Machinery industry with market capitalizations ranging from €93m to €372m, the reported median CEO total compensation was €625k. Hence, we can conclude that Andreas Pleßke is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	€600k	€600k	65%
Other	€326k	€520k	35%
Total Compensation	€926k	€1.1m	100%

Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. It's interesting to note that Koenig & Bauer pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Koenig & Bauer AG's Growth Numbers

Koenig & Bauer AG's earnings per share (EPS) grew 105% per year over the last three years. It achieved revenue growth of 5.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Koenig & Bauer AG Been A Good Investment?

With a total shareholder return of -51% over three years, Koenig & Bauer AG shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

Whatever your view on compensation, you might want to check if insiders are buying or selling Koenig & Bauer shares (free trial).

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com