Does 7C Solarparken's (ETR:HRPK) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to Steven De Proost who has served as CEO of 7C Solarparken AG (ETR:HRPK) since 2014. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for 7C Solarparken

How Does Total Compensation For Steven De Proost Compare With Other Companies In The Industry?

At the time of writing, our data shows that 7C Solarparken AG has a market capitalization of €239m, and reported total annual CEO compensation of €226k for the year to December 2019. That is, the compensation was roughly the same as last year. Notably, the salary which is €160.0k, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between €84m and €337m had a median total CEO compensation of €226k. This suggests that 7C Solarparken remunerates its CEO largely in line with the industry average. What's more, Steven De Proost holds €8.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. According to our research, 7C Solarparken has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

7C Solarparken AG's Growth

7C Solarparken AG has reduced its earnings per share by 6.3% a year over the last three years. Its revenue is up 10% over the last year.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. 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 7C Solarparken AG Been A Good Investment?

Most shareholders would probably be pleased with 7C Solarparken AG for providing a total return of 81% 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.

In Summary...

As we touched on above, 7C Solarparken AG is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good when you see that EPS growth over the last three years has been negative. But on the bright side, shareholder returns have moved northward during the same period. We wouldn't say CEO compensation is too high, but shareholders might think performance needs to be improved before paying any more.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for 7C Solarparken (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from 7C Solarparken, 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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