Is Allianz SE (FRA:ALV) Excessively Paying Its CEO?

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Oliver Bäte has been the CEO of Allianz SE (FRA:ALV) since 2015. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Allianz

How Does Oliver Bäte's Compensation Compare With Similar Sized Companies?

Our data indicates that Allianz SE is worth €78b, and total annual CEO compensation is €5.9m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €1.1m. When we examined a group of companies with market caps over €7.1b, we found that their median CEO compensation was €3.9m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

Thus we can conclude that Oliver Bäte receives more in total compensation than the median of a group of large companies in the same market as Allianz SE. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Allianz has changed from year to year.

Is Allianz SE Growing?

Over the last three years Allianz SE has grown its earnings per share (EPS) by an average of 4.8% per year (using a line of best fit). Revenue was pretty flat on last year.

I generally like to see a little revenue growth, but it is good to see EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has Allianz SE Been A Good Investment?

Most shareholders would probably be pleased with Allianz SE for providing a total return of 63% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at Allianz SE with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.

While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Allianz shares (free trial).

Important note: Allianz may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.