We Think Shareholders Are Less Likely To Approve A Large Pay Rise For TUI AG's (ETR:TUI1) CEO For Now

Key Insights

• TUI to hold its Annual General Meeting on 11th of February
• Salary of €1.10m is part of CEO Sebastian Ebel's total remuneration
• The overall pay is 31% above the industry average
• Over the past three years, TUI's EPS grew by 136% and over the past three years, the total loss to shareholders 49%

Shareholders of TUI AG (ETR:TUI1) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 11th of February. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for TUI

How Does Total Compensation For Sebastian Ebel Compare With Other Companies In The Industry?

Our data indicates that TUI AG has a market capitalization of €4.1b, and total annual CEO compensation was reported as €2.7m for the year to September 2024. Notably, that's a decrease of 8.5% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.1m.

On examining similar-sized companies in the German Hospitality industry with market capitalizations between €1.9b and €6.2b, we discovered that the median CEO total compensation of that group was €2.1m. Hence, we can conclude that Sebastian Ebel is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	€1.1m	€1.1m	41%
Other	€1.6m	€1.9m	59%
Total Compensation	€2.7m	€3.0m	100%

On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. In TUI's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at TUI AG's Growth Numbers

Over the past three years, TUI AG has seen its earnings per share (EPS) grow by 136% per year. In the last year, its revenue is up 12%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has TUI AG Been A Good Investment?

With a total shareholder return of -49% over three years, TUI AG shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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 compensation is one thing, but it is also interesting to check if the CEO is buying or selling TUI (free visualization of insider trades).

Switching gears from TUI, 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.