We think SMA Solar Technology AG's (ETR:S92) CEO May Struggle To See Much Of A Pay Rise This Year

Key Insights

• SMA Solar Technology's Annual General Meeting to take place on 28th of May
• Salary of €1.19m is part of CEO Jurgen Reinert's total remuneration
• The total compensation is similar to the average for the industry
• SMA Solar Technology's total shareholder return over the past three years was 4.3% while its EPS grew by 77% over the past three years

CEO Jurgen Reinert has done a decent job of delivering relatively good performance at SMA Solar Technology AG (ETR:S92) recently. As shareholders go into the upcoming AGM on 28th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for SMA Solar Technology

How Does Total Compensation For Jurgen Reinert Compare With Other Companies In The Industry?

At the time of writing, our data shows that SMA Solar Technology AG has a market capitalization of €1.6b, and reported total annual CEO compensation of €1.7m for the year to December 2023. That's a notable increase of 60% on last year. We note that the salary portion, which stands at €1.19m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the German Semiconductor industry with market capitalizations ranging from €921m to €2.9b, the reported median CEO total compensation was €1.7m. So it looks like SMA Solar Technology compensates Jurgen Reinert in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€1.2m	€949k	71%
Other	€479k	€94k	29%
Total Compensation	€1.7m	€1.0m	100%

On an industry level, roughly 31% of total compensation represents salary and 69% is other remuneration. SMA Solar Technology pays out 71% of remuneration in the form of a salary, significantly higher than the industry average. 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

SMA Solar Technology AG's earnings per share (EPS) grew 77% per year over the last three years. Its revenue is up 57% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has SMA Solar Technology AG Been A Good Investment?

SMA Solar Technology AG has not done too badly by shareholders, with a total return of 4.3%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

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. That's why we did our research, and identified 3 warning signs for SMA Solar Technology (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.