We Discuss Why Cancom SE's (ETR:COK) CEO Compensation May Be Closely Reviewed

Key Insights

• Cancom's Annual General Meeting to take place on 24th of June
• Salary of €520.0k is part of CEO Rudiger Rath's total remuneration
• The overall pay is 96% above the industry average
• Cancom's EPS declined by 13% over the past three years while total shareholder loss over the past three years was 10%

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Shareholders will probably not be too impressed with the underwhelming results at Cancom SE (ETR:COK) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 24th of June. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Cancom

Comparing Cancom SE's CEO Compensation With The Industry

Our data indicates that Cancom SE has a market capitalization of €900m, and total annual CEO compensation was reported as €943k for the year to December 2024. We note that's an increase of 9.7% above last year. We note that the salary of €520.0k makes up a sizeable portion of the total compensation received by the CEO.

On examining similar-sized companies in the German IT industry with market capitalizations between €348m and €1.4b, we discovered that the median CEO total compensation of that group was €482k. Hence, we can conclude that Rudiger Rath is remunerated higher than the industry median.

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. In Cancom's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Cancom SE's Growth

Over the last three years, Cancom SE has shrunk its earnings per share by 13% per year. It achieved revenue growth of 3.7% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Cancom SE Been A Good Investment?

Since shareholders would have lost about 10% over three years, some Cancom SE investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Cancom that you should be aware of before investing.

Switching gears from Cancom, 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.

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.