Is RIB Software SE's (ETR:RIB) CEO Being Overpaid?

The CEO of RIB Software SE (ETR:RIB) is Tom Wolf. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for RIB Software

How Does Tom Wolf's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that RIB Software SE has a market cap of €945m, and reported total annual CEO compensation of €1.4m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €395k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from €362m to €1.4b, and discovered that the median CEO total compensation of that group was €1.0m.

So Tom Wolf is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at RIB Software, below.

Is RIB Software SE Growing?

On average over the last three years, RIB Software SE has grown earnings per share (EPS) by 7.2% each year (using a line of best fit). It achieved revenue growth of 42% over the last year.

I like the look of the strong year-on-year improvement in revenue. Combined with modest EPS growth, we get a good impression of the company. So while I'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives!

Has RIB Software SE Been A Good Investment?

I think that the total shareholder return of 86%, over three years, would leave most RIB Software SE shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Tom Wolf is paid around the same as most CEOs of similar size companies.

While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So all things considered I'd venture that the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling RIB Software (free visualization of insider trades).

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.

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