How Much is Vonovia's (ETR:VNA) CEO Getting Paid?

Rolf Buch has been the CEO of Vonovia SE (ETR:VNA) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Vonovia

Comparing Vonovia SE's CEO Compensation With the industry

At the time of writing, our data shows that Vonovia SE has a market capitalization of €32b, and reported total annual CEO compensation of €4.9m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.2m.

For comparison, other companies in the industry with market capitalizations above €6.6b, reported a median total CEO compensation of €2.3m. Accordingly, our analysis reveals that Vonovia SE pays Rolf Buch north of the industry median.

On an industry level, around 41% of total compensation represents salary and 59% is other remuneration. Vonovia pays a modest slice of remuneration through salary, as compared 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.

Vonovia SE's Growth

Vonovia SE has reduced its earnings per share by 7.0% a year over the last three years. It saw its revenue drop 1.1% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Vonovia SE Been A Good Investment?

Most shareholders would probably be pleased with Vonovia SE for providing a total return of 50% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we touched on above, Vonovia SE is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. We feel that EPS have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. Considering positive investor returns, it would be bold of us to criticize CEO compensation, but shareholders might want to see healthier EPS growth before a raise is given out.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for Vonovia you should be aware of, and 2 of them shouldn't be ignored.

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.

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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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