Shareholders May Be Wary Of Increasing secunet Security Networks Aktiengesellschaft's (ETR:YSN) CEO Compensation Package

Key Insights

• secunet Security Networks' Annual General Meeting to take place on 28th of May
• Salary of €320.0k is part of CEO Axel Deininger's total remuneration
• Total compensation is similar to the industry average
• secunet Security Networks' three-year loss to shareholders was 37% while its EPS was down 13% over the past three years

Our free stock report includes 1 warning sign investors should be aware of before investing in secunet Security Networks. Read for free now.

Shareholders will probably not be too impressed with the underwhelming results at secunet Security Networks Aktiengesellschaft (ETR:YSN) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28th of May. 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. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for secunet Security Networks

Comparing secunet Security Networks Aktiengesellschaft's CEO Compensation With The Industry

According to our data, secunet Security Networks Aktiengesellschaft has a market capitalization of €1.3b, and paid its CEO total annual compensation worth €482k over the year to December 2024. That's a notable increase of 8.7% on last year. In particular, the salary of €320.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the German IT industry with market caps ranging from €883m to €2.8b, we found that the median CEO total compensation was €478k. So it looks like secunet Security Networks compensates Axel Deininger in line with the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	€320k	€270k	66%
Other	€162k	€173k	34%
Total Compensation	€482k	€443k	100%

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. Although there is a difference in how total compensation is set, secunet Security Networks more or less reflects the market in terms of setting the salary. 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 secunet Security Networks Aktiengesellschaft's Growth Numbers

Over the last three years, secunet Security Networks Aktiengesellschaft has shrunk its earnings per share by 13% per year. Its revenue is up 3.2% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 secunet Security Networks Aktiengesellschaft Been A Good Investment?

The return of -37% over three years would not have pleased secunet Security Networks Aktiengesellschaft shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for secunet Security Networks that investors should look into moving forward.

Important note: secunet Security Networks is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.