Increases to Metro AG's (ETR:B4B) CEO Compensation Might Cool off for now

Key Insights

• Metro will host its Annual General Meeting on 7th of February
• Salary of €1.10m is part of CEO Steffen Greubel's total remuneration
• The total compensation is 190% higher than the average for the industry
• Metro's three-year loss to shareholders was 31% while its EPS grew by 81% over the past three years

In the past three years, the share price of Metro AG (ETR:B4B) has struggled to grow and now shareholders are sitting on a loss. 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 7th of February. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Metro

Comparing Metro AG's CEO Compensation With The Industry

At the time of writing, our data shows that Metro AG has a market capitalization of €2.3b, and reported total annual CEO compensation of €2.4m for the year to September 2023. Notably, that's a decrease of 20% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.1m.

For comparison, other companies in the Germany Consumer Retailing industry with market capitalizations ranging between €1.9b and €5.9b had a median total CEO compensation of €843k. This suggests that Steffen Greubel is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€1.1m	€1.1m	45%
Other	€1.3m	€2.0m	55%
Total Compensation	€2.4m	€3.1m	100%

Speaking on an industry level, nearly 44% of total compensation represents salary, while the remainder of 56% is other remuneration. There isn't a significant difference between Metro and the broader market, in terms of salary allocation in the overall compensation package. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Metro AG's Growth

Over the past three years, Metro AG has seen its earnings per share (EPS) grow by 81% per year. In the last year, its revenue is up 2.7%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Metro AG Been A Good Investment?

The return of -31% over three years would not have pleased Metro AG shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Metro (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Metro, 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.