Stock Analysis

TAG Immobilien AG's (ETR:TEG) CEO Compensation Looks Acceptable To Us And Here's Why

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Key Insights

  • TAG Immobilien to hold its Annual General Meeting on 28th of May
  • Total pay for CEO Claudia Hoyer includes €440.0k salary
  • Total compensation is 62% below industry average
  • Over the past three years, TAG Immobilien's EPS fell by 89% and over the past three years, the total loss to shareholders 35%

The performance at TAG Immobilien AG (ETR:TEG) has been rather lacklustre of late and shareholders may be wondering what CEO Claudia Hoyer is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 28th of May. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for TAG Immobilien

How Does Total Compensation For Claudia Hoyer Compare With Other Companies In The Industry?

At the time of writing, our data shows that TAG Immobilien AG has a market capitalization of €2.6b, and reported total annual CEO compensation of €480k for the year to December 2023. That's just a smallish increase of 4.3% on last year. We note that the salary portion, which stands at €440.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the German Real Estate industry with market capitalizations ranging from €1.8b to €5.9b, the reported median CEO total compensation was €1.3m. That is to say, Claudia Hoyer is paid under the industry median.

Component20232022Proportion (2023)
Salary €440k €420k 92%
Other €40k €40k 8%
Total Compensation€480k €460k100%

Talking in terms of the industry, salary represented approximately 54% of total compensation out of all the companies we analyzed, while other remuneration made up 46% of the pie. According to our research, TAG Immobilien has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

XTRA:TEG CEO Compensation May 22nd 2024

A Look at TAG Immobilien AG's Growth Numbers

TAG Immobilien AG has reduced its earnings per share by 89% a year over the last three years. Its revenue is up 36% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 TAG Immobilien AG Been A Good Investment?

Few TAG Immobilien AG shareholders would feel satisfied with the return of -35% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. The poor performance of the share price might have something to do with the lack of earnings growth. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for TAG Immobilien that investors should look into moving forward.

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.

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

Find out whether TAG Immobilien 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.