Should Shareholders Reconsider Branicks Group AG's (ETR:DIC) CEO Compensation Package?

Key Insights

• Branicks Group's Annual General Meeting to take place on 20th of August
• Salary of €1.25m is part of CEO Sonja Warntges's total remuneration
• The total compensation is 236% higher than the average for the industry
• Branicks Group's EPS declined by 121% over the past three years while total shareholder loss over the past three years was 81%

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The results at Branicks Group AG (ETR:DIC) have been quite disappointing recently and CEO Sonja Warntges bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20th of August. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Branicks Group

How Does Total Compensation For Sonja Warntges Compare With Other Companies In The Industry?

At the time of writing, our data shows that Branicks Group AG has a market capitalization of €167m, and reported total annual CEO compensation of €1.3m for the year to December 2024. We note that's a decrease of 24% compared to last year. Notably, the salary which is €1.25m, represents most of the total compensation being paid.

In comparison with other companies in the German Real Estate industry with market capitalizations ranging from €85m to €342m, the reported median CEO total compensation was €379k. Hence, we can conclude that Sonja Warntges is remunerated higher than the industry median.

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. Branicks Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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.

A Look at Branicks Group AG's Growth Numbers

Over the last three years, Branicks Group AG has shrunk its earnings per share by 121% per year. Its revenue is down 7.7% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Branicks Group AG Been A Good Investment?

Few Branicks Group AG shareholders would feel satisfied with the return of -81% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Sonja receives almost all of their compensation through a salary. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Branicks Group that investors should look into moving forward.

Switching gears from Branicks Group, 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.

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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.