Shareholders May Be More Conservative With Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien's (ETR:BVB) CEO Compensation For Now

Key Insights

• Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien will host its Annual General Meeting on 25th of November
• Salary of €2.40m is part of CEO Hans-Joachim Watzke's total remuneration
• Total compensation is 348% above industry average
• Over the past three years, Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien's EPS grew by 81% and over the past three years, the total loss to shareholders 33%

In the past three years, the share price of Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien (ETR:BVB) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 25th of November. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien

How Does Total Compensation For Hans-Joachim Watzke Compare With Other Companies In The Industry?

At the time of writing, our data shows that Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien has a market capitalization of €342m, and reported total annual CEO compensation of €2.4m for the year to June 2024. That is, the compensation was roughly the same as last year. Notably, the salary which is €2.40m, represents most of the total compensation being paid.

On examining similar-sized companies in the German Entertainment industry with market capitalizations between €190m and €760m, we discovered that the median CEO total compensation of that group was €546k. Accordingly, our analysis reveals that Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien pays Hans-Joachim Watzke north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	€2.4m	€2.4m	98%
Other	€46k	€40k	2%
Total Compensation	€2.4m	€2.4m	100%

On an industry level, around 71% of total compensation represents salary and 29% is other remuneration. Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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.

A Look at Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien's Growth Numbers

Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien's earnings per share (EPS) grew 81% per year over the last three years. It achieved revenue growth of 8.0% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien Been A Good Investment?

With a total shareholder return of -33% over three years, Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Hans-Joachim receives almost all of their compensation through a salary. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

Whatever your view on compensation, you might want to check if insiders are buying or selling Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien shares (free trial).

Important note: Borussia Dortmund GmbH Kommanditgesellschaft auf Aktien 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.