What Does Deutsche Post's (ETR:DPW) CEO Pay Reveal?

This article will reflect on the compensation paid to Frank Appel who has served as CEO of Deutsche Post AG (ETR:DPW) since 2008. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Deutsche Post.

Check out our latest analysis for Deutsche Post

How Does Total Compensation For Frank Appel Compare With Other Companies In The Industry?

At the time of writing, our data shows that Deutsche Post AG has a market capitalization of €43b, and reported total annual CEO compensation of €7.7m for the year to December 2019. We note that's an increase of 19% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €2.1m.

For comparison, other companies in the industry with market capitalizations above €6.8b, reported a median total CEO compensation of €3.6m. Accordingly, our analysis reveals that Deutsche Post AG pays Frank Appel north of the industry median.

On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. In Deutsche Post's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Deutsche Post AG's Growth

Over the last three years, Deutsche Post AG has shrunk its earnings per share by 7.0% per year. In the last year, its revenue is up 2.3%.

Few shareholders would be pleased to read that earnings have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Deutsche Post AG Been A Good Investment?

With a total shareholder return of 12% over three years, Deutsche Post AG shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we noted earlier, Deutsche Post pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look great when you realize that the company has been suffering from negative earnings growth for the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you can understand why we do not think CEO compensation is particularly modest!

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Deutsche Post that you should be aware of before investing.

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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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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