A Look At HORNBACH Holding KGaA's (ETR:HBH) CEO Remuneration

The CEO of HORNBACH Holding AG & Co. KGaA (ETR:HBH) is Albrecht Hornbach, 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 earnings and shareholder returns of the company.

View our latest analysis for HORNBACH Holding KGaA

Comparing HORNBACH Holding AG & Co. KGaA's CEO Compensation With the industry

According to our data, HORNBACH Holding AG & Co. KGaA has a market capitalization of €1.3b, and paid its CEO total annual compensation worth €1.0m over the year to February 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €425k.

On examining similar-sized companies in the industry with market capitalizations between €822m and €2.6b, we discovered that the median CEO total compensation of that group was €1.1m. This suggests that HORNBACH Holding KGaA remunerates its CEO largely in line with the industry average. What's more, Albrecht Hornbach holds €8.7m 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 63% of total compensation represents salary, while the remainder of 37% is other remuneration. It's interesting to note that HORNBACH Holding KGaA allocates a smaller portion of compensation to salary in comparison 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.

HORNBACH Holding AG & Co. KGaA's Growth

Over the past three years, HORNBACH Holding AG & Co. KGaA has seen its earnings per share (EPS) grow by 29% per year. It achieved revenue growth of 18% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 HORNBACH Holding AG & Co. KGaA Been A Good Investment?

HORNBACH Holding AG & Co. KGaA has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we touched on above, HORNBACH Holding AG & Co. KGaA is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, it's admirable that over the last three years, EPS growth for the company has been impressive, though the same can't be said for investor returns. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.

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. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in HORNBACH Holding KGaA we think you should know about.

Switching gears from HORNBACH Holding KGaA, 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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