Some Shareholders May Object To A Pay Rise For Fresenius Medical Care AG's (ETR:FME) CEO This Year

Key Insights

• Fresenius Medical Care's Annual General Meeting to take place on 16th of May
• CEO Helen Giza's total compensation includes salary of €1.67m
• The total compensation is 37% less than the average for the industry
• Fresenius Medical Care's three-year loss to shareholders was 38% while its EPS was down 25% over the past three years

The underwhelming performance at Fresenius Medical Care AG (ETR:FME) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 16th of May. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

View our latest analysis for Fresenius Medical Care

How Does Total Compensation For Helen Giza Compare With Other Companies In The Industry?

According to our data, Fresenius Medical Care AG has a market capitalization of €11b, and paid its CEO total annual compensation worth €5.5m over the year to December 2023. Notably, that's an increase of 72% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.7m.

For comparison, other companies in the German Healthcare industry with market capitalizations above €7.4b, reported a median total CEO compensation of €8.7m. In other words, Fresenius Medical Care pays its CEO lower than the industry median. Furthermore, Helen Giza directly owns €533k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	€1.7m	€1.4m	30%
Other	€3.9m	€1.8m	70%
Total Compensation	€5.5m	€3.2m	100%

On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. It's interesting to note that Fresenius Medical Care allocates a smaller portion of compensation to salary 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.

Fresenius Medical Care AG's Growth

Over the last three years, Fresenius Medical Care AG has shrunk its earnings per share by 25% per year. Revenue was pretty flat on last year.

Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Fresenius Medical Care AG Been A Good Investment?

With a total shareholder return of -38% over three years, Fresenius Medical Care AG shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Fresenius Medical Care that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.