Shareholders May Be Wary Of Increasing SMA Solar Technology AG's (ETR:S92) CEO Compensation Package

Key Insights

• SMA Solar Technology to hold its Annual General Meeting on 3rd of June
• Total pay for CEO Jurgen Reinert includes €1.42m salary
• Total compensation is 49% above industry average
• Over the past three years, SMA Solar Technology's EPS fell by 0.3% and over the past three years, the total loss to shareholders 53%

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Shareholders will probably not be too impressed with the underwhelming results at SMA Solar Technology AG (ETR:S92) recently. At the upcoming AGM on 3rd of June, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for SMA Solar Technology

Comparing SMA Solar Technology AG's CEO Compensation With The Industry

Our data indicates that SMA Solar Technology AG has a market capitalization of €720m, and total annual CEO compensation was reported as €2.6m for the year to December 2024. Notably, that's an increase of 54% over the year before. We note that the salary of €1.42m makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the German Semiconductor industry with market capitalizations ranging between €353m and €1.4b had a median total CEO compensation of €1.7m. Accordingly, our analysis reveals that SMA Solar Technology AG pays Jurgen Reinert north of the industry median.

On an industry level, around 36% of total compensation represents salary and 64% is other remuneration. SMA Solar Technology is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at SMA Solar Technology AG's Growth Numbers

Over the last three years, SMA Solar Technology AG has not seen its earnings per share change much, though they have deteriorated slightly. In the last year, its revenue is down 21%.

The lack of EPS growth is certainly uninspiring. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has SMA Solar Technology AG Been A Good Investment?

With a total shareholder return of -53% over three years, SMA Solar Technology AG shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for SMA Solar Technology that investors should look into moving forward.

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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.