What We Learned About Deutsche Konsum REIT-AG's (ETR:DKG) CEO Compensation

The CEO of Deutsche Konsum REIT-AG (ETR:DKG) is Rolf Elgeti, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the funds from operations and shareholder returns of the company.

See our latest analysis for Deutsche Konsum REIT-AG

Comparing Deutsche Konsum REIT-AG's CEO Compensation With the industry

Our data indicates that Deutsche Konsum REIT-AG has a market capitalization of €540m, and total annual CEO compensation was reported as €71k for the year to September 2020. That is, the compensation was roughly the same as last year. Notably, the salary of €71k is the entirety of the CEO compensation.

On examining similar-sized companies in the industry with market capitalizations between €327m and €1.3b, we discovered that the median CEO total compensation of that group was €592k. Accordingly, Deutsche Konsum REIT-AG pays its CEO under the industry median. What's more, Rolf Elgeti holds €4.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 47% of total compensation represents salary, while the remainder of 53% is other remuneration. On a company level, Deutsche Konsum REIT-AG prefers to reward its CEO through a salary, opting not to pay Rolf Elgeti through 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 Deutsche Konsum REIT-AG's Growth Numbers

Deutsche Konsum REIT-AG has seen its funds from operations (FFO) increase by 51% per year over the past three years. It achieved revenue growth of 44% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term FFO improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Deutsche Konsum REIT-AG Been A Good Investment?

We think that the total shareholder return of 60%, over three years, would leave most Deutsche Konsum REIT-AG shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Deutsche Konsum REIT-AG pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Deutsche Konsum REIT-AG pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Since FFO growth is heading in a positive direction; many would agree with our assessment that the pay is modest. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is significant) in Deutsche Konsum REIT-AG we think you should know about.

Switching gears from Deutsche Konsum REIT-AG, 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. 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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