Does RealTech's (ETR:RTC) CEO Salary Compare Well With The Performance Of The Company?

Daniele Di Croce became the CEO of RealTech AG (ETR:RTC) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether RealTech pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for RealTech

Comparing RealTech AG's CEO Compensation With the industry

According to our data, RealTech AG has a market capitalization of €4.5m, and paid its CEO total annual compensation worth €238k over the year to December 2019. This means that the compensation hasn't changed much from last year. Notably, the salary which is €173.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under €164m, the reported median total CEO compensation was €275k. From this we gather that Daniele Di Croce is paid around the median for CEOs in the industry. What's more, Daniele Di Croce holds €769k 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. RealTech pays out 73% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

RealTech AG's Growth

Over the last three years, RealTech AG has shrunk its earnings per share by 109% per year. Its revenue is down 30% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has RealTech AG Been A Good Investment?

Given the total shareholder loss of 35% over three years, many shareholders in RealTech AG are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, RealTech AG is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for RealTech that investors should think about before committing capital to this stock.

Switching gears from RealTech, 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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