Here's Why We Think Carl Zeiss Meditec AG's (ETR:AFX) CEO Compensation Looks Fair for the time being

Under the guidance of CEO Ludwin Monz, Carl Zeiss Meditec AG (ETR:AFX) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27 May 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for Carl Zeiss Meditec

How Does Total Compensation For Ludwin Monz Compare With Other Companies In The Industry?

At the time of writing, our data shows that Carl Zeiss Meditec AG has a market capitalization of €13b, and reported total annual CEO compensation of €1.9m for the year to September 2020. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €400k.

On comparing similar companies in the industry with market capitalizations above €6.6b, we found that the median total CEO compensation was €2.5m. From this we gather that Ludwin Monz is paid around the median for CEOs in the industry.

Component	2020	2019	Proportion (2020)
Salary	€400k	€400k	21%
Other	€1.5m	€1.5m	79%
Total Compensation	€1.9m	€1.9m	100%

Talking in terms of the industry, salary represented approximately 28% of total compensation out of all the companies we analyzed, while other remuneration made up 72% of the pie. Carl Zeiss Meditec sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Carl Zeiss Meditec AG's Growth

Carl Zeiss Meditec AG's earnings per share (EPS) grew 7.3% per year over the last three years. It saw its revenue drop 7.9% over the last year.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Carl Zeiss Meditec AG Been A Good Investment?

We think that the total shareholder return of 151%, over three years, would leave most Carl Zeiss Meditec AG shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

So you may want to check if insiders are buying Carl Zeiss Meditec shares with their own money (free access).

Important note: Carl Zeiss Meditec is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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