Stock Analysis

How Much is Deutsche Wohnen's (ETR:DWNI) CEO Getting Paid?

XTRA:DWNI
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This article will reflect on the compensation paid to Michael Zahn who has served as CEO of Deutsche Wohnen SE (ETR:DWNI) since 2008. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Deutsche Wohnen

Comparing Deutsche Wohnen SE's CEO Compensation With the industry

According to our data, Deutsche Wohnen SE has a market capitalization of €15b, and paid its CEO total annual compensation worth €2.3m over the year to December 2019. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.0m.

For comparison, other companies in the industry with market capitalizations above €6.8b, reported a median total CEO compensation of €2.3m. From this we gather that Michael Zahn is paid around the median for CEOs in the industry. Furthermore, Michael Zahn directly owns €3.6m worth of shares in the company.

Component20192018Proportion (2019)
Salary €1.0m €1.0m 44%
Other €1.3m €1.3m 56%
Total Compensation€2.3m €2.3m100%

On an industry level, around 41% of total compensation represents salary and 59% is other remuneration. Although there is a difference in how total compensation is set, Deutsche Wohnen more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
XTRA:DWNI CEO Compensation August 8th 2020

A Look at Deutsche Wohnen SE's Growth Numbers

Deutsche Wohnen SE saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is up 49%.

The decrease in earnings could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one 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 Deutsche Wohnen SE Been A Good Investment?

Boasting a total shareholder return of 36% over three years, Deutsche Wohnen SE has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As previously discussed, Michael is compensated close to the median for companies of its size, and which belong to the same industry. Shareholder returns for the company have been strong for the last three years. Revenues have also showed some positive momentum, recently. However, on a concerning note, EPS is not growing. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Deutsche Wohnen you should be aware of, and 1 of them is a bit unpleasant.

Switching gears from Deutsche Wohnen, 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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