Here's Why We Think BASF SE's (ETR:BAS) CEO Compensation Looks Fair for the time being

Key Insights

• BASF will host its Annual General Meeting on 2nd of May
• Salary of €1.68m is part of CEO Markus Kamieth's total remuneration
• The overall pay is comparable to the industry average
• BASF's EPS declined by 38% over the past three years while total shareholder return over the past three years was 10%

We've discovered 3 warning signs about BASF. View them for free.

Despite positive share price growth of 10% for BASF SE (ETR:BAS) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 2nd of May. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for BASF

Comparing BASF SE's CEO Compensation With The Industry

Our data indicates that BASF SE has a market capitalization of €40b, and total annual CEO compensation was reported as €5.3m for the year to December 2024. We note that's an increase of 40% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.7m.

In comparison with other companies in the German Chemicals industry with market capitalizations over €7.0b, the reported median total CEO compensation was €5.1m. From this we gather that Markus Kamieth is paid around the median for CEOs in the industry.

On an industry level, roughly 31% of total compensation represents salary and 69% is other remuneration. Our data reveals that BASF allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

BASF SE's Growth

Over the last three years, BASF SE has shrunk its earnings per share by 38% per year. In the last year, its revenue is down 5.3%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 BASF SE Been A Good Investment?

BASF SE has generated a total shareholder return of 10% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for BASF (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

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.

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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.