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

Stefan Schulte has been the CEO of Fraport AG (ETR:FRA) since 2009, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Fraport pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Fraport

How Does Total Compensation For Stefan Schulte Compare With Other Companies In The Industry?

According to our data, Fraport AG has a market capitalization of €4.3b, and paid its CEO total annual compensation worth €2.4m over the year to December 2019. Notably, that's a decrease of 11% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at €415k.

On comparing similar companies from the same industry with market caps ranging from €3.3b to €10b, we found that the median CEO total compensation was €1.2m. Accordingly, our analysis reveals that Fraport AG pays Stefan Schulte north of the industry median.

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. It's interesting to note that Fraport allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Fraport AG's Growth

Over the last three years, Fraport AG has shrunk its earnings per share by 36% per year. Its revenue is down 42% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Fraport AG Been A Good Investment?

Since shareholders would have lost about 41% over three years, some Fraport AG investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Fraport pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Fraport (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Fraport, 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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