What Can We Make Of adesso's (ETR:ADN1) CEO Compensation?

This article will reflect on the compensation paid to Michael Kenfenheuer who has served as CEO of adesso SE (ETR:ADN1) since 2011. This analysis will also assess whether adesso pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for adesso

How Does Total Compensation For Michael Kenfenheuer Compare With Other Companies In The Industry?

According to our data, adesso SE has a market capitalization of €552m, and paid its CEO total annual compensation worth €491k over the year to December 2019. Notably, that's a decrease of 34% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €245k.

For comparison, other companies in the same industry with market capitalizations ranging between €339m and €1.4b had a median total CEO compensation of €628k. So it looks like adesso compensates Michael Kenfenheuer in line with the median for the industry. What's more, Michael Kenfenheuer holds €2.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. adesso is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

adesso SE's Growth

adesso SE's earnings per share (EPS) grew 19% per year over the last three years. In the last year, its revenue is up 17%.

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. 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 adesso SE Been A Good Investment?

Most shareholders would probably be pleased with adesso SE for providing a total return of 75% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As previously discussed, Michael is compensated close to the median for companies of its size, and which belong to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. Indeed, many might consider that Michael is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

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 adesso that investors should look into moving forward.

Switching gears from adesso, 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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