How Should Investors Feel About Deutsche Beteiligungs' (ETR:DBAN) CEO Remuneration?

Torsten Grede has been the CEO of Deutsche Beteiligungs AG (ETR:DBAN) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Deutsche Beteiligungs pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Deutsche Beteiligungs

Comparing Deutsche Beteiligungs AG's CEO Compensation With the industry

According to our data, Deutsche Beteiligungs AG has a market capitalization of €577m, and paid its CEO total annual compensation worth €964k over the year to September 2020. Notably, that's a decrease of 27% over the year before. In particular, the salary of €640.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between €330m and €1.3b had a median total CEO compensation of €849k. From this we gather that Torsten Grede is paid around the median for CEOs in the industry.

On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. According to our research, Deutsche Beteiligungs has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Deutsche Beteiligungs AG's Growth

Over the last three years, Deutsche Beteiligungs AG has shrunk its earnings per share by 69% per year. In the last year, its revenue is down 84%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Deutsche Beteiligungs AG Been A Good Investment?

With a three year total loss of 8.8% for the shareholders, Deutsche Beteiligungs AG would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Deutsche Beteiligungs AG is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Deutsche Beteiligungs that investors should think about before committing capital to this stock.

Switching gears from Deutsche Beteiligungs, 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. 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.
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