Key Insights
- Fresenius SE KGaA will host its Annual General Meeting on 23rd of May
- Salary of €1.68m is part of CEO Michael Sen's total remuneration
- Total compensation is similar to the industry average
- Over the past three years, Fresenius SE KGaA's EPS fell by 13% and over the past three years, the total shareholder return was 38%
Despite strong share price growth of 38% for Fresenius SE & Co. KGaA (ETR:FRE) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 23rd of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
See our latest analysis for Fresenius SE KGaA
Comparing Fresenius SE & Co. KGaA's CEO Compensation With The Industry
Our data indicates that Fresenius SE & Co. KGaA has a market capitalization of €24b, and total annual CEO compensation was reported as €7.0m for the year to December 2024. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.7m.
In comparison with other companies in the German Healthcare industry with market capitalizations over €7.2b, the reported median total CEO compensation was €9.8m. So it looks like Fresenius SE KGaA compensates Michael Sen in line with the median for the industry.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | €1.7m | €1.7m | 24% |
| Other | €5.3m | €5.3m | 76% |
| Total Compensation | €7.0m | €7.0m | 100% |
Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. Fresenius SE KGaA pays a modest slice of remuneration through salary, as compared 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 SE & Co. KGaA's Growth
Over the last three years, Fresenius SE & Co. KGaA has shrunk its earnings per share by 13% per year. It achieved revenue growth of 4.6% over the last year.
Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. 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 Fresenius SE & Co. KGaA Been A Good Investment?
Boasting a total shareholder return of 38% over three years, Fresenius SE & Co. KGaA has done well by shareholders. 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...
Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Fresenius SE KGaA that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
Valuation is complex, but we're here to simplify it.
Discover if Fresenius SE KGaA might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.