In 2012 Frank Mastiaux was appointed CEO of EnBW Energie Baden-Württemberg AG (ETR:EBK). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Frank Mastiaux’s Compensation Compare With Similar Sized Companies?
Our data indicates that EnBW Energie Baden-Württemberg AG is worth €13b, and total annual CEO compensation was reported as €3.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €990k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over €7.2b and the median CEO total compensation was €4.1m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
That means Frank Mastiaux receives fairly typical remuneration for the CEO of a large company. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at EnBW Energie Baden-Württemberg has changed over time.
Is EnBW Energie Baden-Württemberg AG Growing?
Over the last three years EnBW Energie Baden-Württemberg AG has grown its earnings per share (EPS) by an average of 63% per year (using a line of best fit). Its revenue is down 6.2% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. Although we don’t have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has EnBW Energie Baden-Württemberg AG Been A Good Investment?
Most shareholders would probably be pleased with EnBW Energie Baden-Württemberg AG for providing a total return of 122% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Frank Mastiaux is paid around what is normal the leaders of larger companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying EnBW Energie Baden-Württemberg shares with their own money (free access).
Important note: EnBW Energie Baden-Württemberg may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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