We Think Shareholders May Want To Consider A Review Of Sixt SE's (ETR:SIX2) CEO Compensation Package

Key Insights

• Sixt to hold its Annual General Meeting on 5th of June
• CEO Alexander Sixt's total compensation includes salary of €1.70m
• The total compensation is similar to the average for the industry
• Sixt's EPS declined by 13% over the past three years while total shareholder loss over the past three years was 26%

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Shareholders will probably not be too impressed with the underwhelming results at Sixt SE (ETR:SIX2) recently. At the upcoming AGM on 5th of June, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Sixt

Comparing Sixt SE's CEO Compensation With The Industry

At the time of writing, our data shows that Sixt SE has a market capitalization of €3.6b, and reported total annual CEO compensation of €2.8m for the year to December 2024. Notably, that's a decrease of 32% over the year before. In particular, the salary of €1.70m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Germany Transportation industry with market caps ranging from €1.8b to €5.6b, we found that the median CEO total compensation was €2.4m. This suggests that Sixt remunerates its CEO largely in line with the industry average.

On an industry level, roughly 57% of total compensation represents salary and 43% is other remuneration. Sixt is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Sixt SE's Growth Numbers

Sixt SE has reduced its earnings per share by 13% a year over the last three years. Its revenue is up 10% over the last year.

Few shareholders would be pleased to read that EPS have declined. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Sixt SE Been A Good Investment?

Since shareholders would have lost about 26% over three years, some Sixt SE investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Sixt that investors should look into moving forward.

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. 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.