Here's Why Shareholders May Want To Be Cautious With Increasing Jenoptik AG's (ETR:JEN) CEO Pay Packet

Key Insights

• Jenoptik will host its Annual General Meeting on 18th of June
• CEO Stefan Traeger's total compensation includes salary of €675.0k
• The total compensation is 49% higher than the average for the industry
• Jenoptik's total shareholder return over the past three years was 20% while its EPS grew by 32% over the past three years

Performance at Jenoptik AG (ETR:JEN) has been reasonably good and CEO Stefan Traeger has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 18th of June. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Jenoptik

Comparing Jenoptik AG's CEO Compensation With The Industry

According to our data, Jenoptik AG has a market capitalization of €1.7b, and paid its CEO total annual compensation worth €1.6m over the year to December 2023. We note that's an increase of 16% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €675k.

On examining similar-sized companies in the German Electronic industry with market capitalizations between €931m and €3.0b, we discovered that the median CEO total compensation of that group was €1.1m. Hence, we can conclude that Stefan Traeger is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	€675k	€650k	43%
Other	€903k	€709k	57%
Total Compensation	€1.6m	€1.4m	100%

On an industry level, roughly 53% of total compensation represents salary and 47% is other remuneration. Jenoptik pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Jenoptik AG's Growth Numbers

Over the past three years, Jenoptik AG has seen its earnings per share (EPS) grow by 32% per year. Its revenue is up 8.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Jenoptik AG Been A Good Investment?

With a total shareholder return of 20% over three years, Jenoptik AG shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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 1 warning sign for Jenoptik that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.