Stock Analysis

Here's Why Shareholders May Want To Be Cautious With Increasing Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien's (ETR:BVB) CEO Pay Packet

XTRA:BVB
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Shareholders of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien (ETR:BVB) will have been dismayed by the negative share price return over the last three years. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 02 December 2021 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

View our latest analysis for Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien

Comparing Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien's CEO Compensation With the industry

At the time of writing, our data shows that Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien has a market capitalization of €481m, and reported total annual CEO compensation of €1.9m for the year to June 2021. That's a fairly small increase of 5.6% over the previous year. Notably, the salary which is €1.91m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from €178m to €714m, the reported median CEO total compensation was €744k. This suggests that Hans-Joachim Watzke is paid more than the median for the industry.

Component20212020Proportion (2021)
Salary €1.9m €1.8m 98%
Other €41k €40k 2%
Total Compensation€1.9m €1.8m100%

On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien has gone down a largely traditional route, paying Hans-Joachim Watzke a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
XTRA:BVB CEO Compensation November 26th 2021

Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien's Growth

Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien has reduced its earnings per share by 79% a year over the last three years. It achieved revenue growth of 26% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien Been A Good Investment?

Few Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien shareholders would feel satisfied with the return of -47% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Hans-Joachim receives almost all of their compensation through a salary. The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien that investors should look into moving forward.

Switching gears from Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Valuation is complex, but we're helping make it simple.

Find out whether Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.

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