Should Shareholders Reconsider New Work SE's (ETR:NWO) CEO Compensation Package?

Key Insights

• New Work will host its Annual General Meeting on 4th of June
• Salary of €500.0k is part of CEO Petra Von Strombeck's total remuneration
• The total compensation is 56% higher than the average for the industry
• New Work's three-year loss to shareholders was 73% while its EPS was down 26% over the past three years

New Work SE (ETR:NWO) has not performed well recently and CEO Petra Von Strombeck will probably need to up their game. At the upcoming AGM on 4th of June, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for New Work

How Does Total Compensation For Petra Von Strombeck Compare With Other Companies In The Industry?

According to our data, New Work SE has a market capitalization of €322m, and paid its CEO total annual compensation worth €1.4m over the year to December 2023. That's a notable increase of 24% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €500k.

In comparison with other companies in the Germany Interactive Media and Services industry with market capitalizations ranging from €184m to €737m, the reported median CEO total compensation was €865k. Accordingly, our analysis reveals that New Work SE pays Petra Von Strombeck north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	€500k	€413k	37%
Other	€852k	€681k	63%
Total Compensation	€1.4m	€1.1m	100%

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. In New Work's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at New Work SE's Growth Numbers

Over the last three years, New Work SE has shrunk its earnings per share by 26% per year. It saw its revenue drop 5.4% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has New Work SE Been A Good Investment?

With a total shareholder return of -73% over three years, New Work SE shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for New Work that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.