Shareholders Will Likely Find Basler Aktiengesellschaft's (ETR:BSL) CEO Compensation Acceptable

The performance at Basler Aktiengesellschaft (ETR:BSL) has been rather lacklustre of late and shareholders may be wondering what CEO Dietmar Ley is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 19 May 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Basler

How Does Total Compensation For Dietmar Ley Compare With Other Companies In The Industry?

Our data indicates that Basler Aktiengesellschaft has a market capitalization of €1.1b, and total annual CEO compensation was reported as €499k for the year to December 2020. We note that's a decrease of 8.3% compared to last year. In particular, the salary of €343.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between €822m and €2.6b had a median total CEO compensation of €874k. This suggests that Dietmar Ley is paid below the industry median. Furthermore, Dietmar Ley directly owns €42m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	€343k	€338k	69%
Other	€156k	€206k	31%
Total Compensation	€499k	€544k	100%

Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. According to our research, Basler has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Basler Aktiengesellschaft's Growth Numbers

Over the last three years, Basler Aktiengesellschaft has shrunk its earnings per share by 9.9% per year. It achieved revenue growth of 9.1% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Basler Aktiengesellschaft Been A Good Investment?

Most shareholders would probably be pleased with Basler Aktiengesellschaft for providing a total return of 93% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us wonder if these strong returns can continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Basler that investors should be aware of in a dynamic business environment.

Important note: Basler 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. 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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