In 2012 Marcelino Fernandez Verdes was appointed CEO of HOCHTIEF Aktiengesellschaft (FRA:HOT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Marcelino Fernandez Verdes’s Compensation Compare With Similar Sized Companies?
According to our data, HOCHTIEF Aktiengesellschaft has a market capitalization of €9.0b, and pays its CEO total annual compensation worth €7.1m. (This is based on the year to December 2018). That’s less than last year. While we always look at total compensation first, we note that the salary component is less, at €1.3m. We took a group of companies with market capitalizations over €7.1b, and calculated the median CEO total compensation to be €4.8m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
It would therefore appear that HOCHTIEF Aktiengesellschaft pays Marcelino Fernandez Verdes more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at HOCHTIEF has changed from year to year.
Is HOCHTIEF Aktiengesellschaft Growing?
On average over the last three years, HOCHTIEF Aktiengesellschaft has grown earnings per share (EPS) by 31% each year (using a line of best fit). In the last year, its revenue is up 5.5%.
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. You might want to check this free visual report on analyst forecasts for future earnings.
Has HOCHTIEF Aktiengesellschaft Been A Good Investment?
HOCHTIEF Aktiengesellschaft has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared total CEO remuneration at HOCHTIEF Aktiengesellschaft with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling HOCHTIEF (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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