Here's Why It's Unlikely That Stratec SE's (ETR:SBS) CEO Will See A Pay Rise This Year

Key Insights

• Stratec to hold its Annual General Meeting on 17th of May
• Total pay for CEO Marcus Wolfinger includes €320.0k salary
• Total compensation is similar to the industry average
• Stratec's three-year loss to shareholders was 61% while its EPS was down 30% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Stratec SE (ETR:SBS) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 17th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Stratec

How Does Total Compensation For Marcus Wolfinger Compare With Other Companies In The Industry?

Our data indicates that Stratec SE has a market capitalization of €507m, and total annual CEO compensation was reported as €1.0m for the year to December 2023. Notably, that's a decrease of 54% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €320k.

On comparing similar companies from the German Medical Equipment industry with market caps ranging from €186m to €743m, we found that the median CEO total compensation was €807k. So it looks like Stratec compensates Marcus Wolfinger in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€320k	€272k	32%
Other	€681k	€1.9m	68%
Total Compensation	€1.0m	€2.2m	100%

Talking in terms of the industry, salary represented approximately 36% of total compensation out of all the companies we analyzed, while other remuneration made up 64% of the pie. It's interesting to note that Stratec allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Stratec SE's Growth

Over the last three years, Stratec SE has shrunk its earnings per share by 30% per year. Its revenue is down 2.9% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Stratec SE Been A Good Investment?

The return of -61% over three years would not have pleased Stratec SE shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Stratec (1 doesn't sit too well with us!) that you should be aware of before investing here.

Important note: Stratec 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. 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.