We Think Some Shareholders May Hesitate To Increase RWE Aktiengesellschaft's (ETR:RWE) CEO Compensation

Key Insights

• RWE's Annual General Meeting to take place on 3rd of May
• Total pay for CEO Markus Krebber includes €1.42m salary
• The total compensation is 3,294% higher than the average for the industry
• Over the past three years, RWE's EPS grew by 14% and over the past three years, the total shareholder return was 6.7%

Under the guidance of CEO Markus Krebber, RWE Aktiengesellschaft (ETR:RWE) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 3rd of May. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for RWE

How Does Total Compensation For Markus Krebber Compare With Other Companies In The Industry?

Our data indicates that RWE Aktiengesellschaft has a market capitalization of €24b, and total annual CEO compensation was reported as €6.4m for the year to December 2023. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.4m.

In comparison with other companies in the German Renewable Energy industry with market capitalizations over €7.5b, the reported median total CEO compensation was €188k. Hence, we can conclude that Markus Krebber is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	€1.4m	€1.3m	22%
Other	€5.0m	€5.0m	78%
Total Compensation	€6.4m	€6.2m	100%

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. In RWE's case, non-salary compensation represents a greater slice of total remuneration, 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.

A Look at RWE Aktiengesellschaft's Growth Numbers

RWE Aktiengesellschaft has seen its earnings per share (EPS) increase by 14% a year over the past three years. In the last year, its revenue is down 22%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has RWE Aktiengesellschaft Been A Good Investment?

RWE Aktiengesellschaft has generated a total shareholder return of 6.7% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for RWE (1 is a bit unpleasant!) that you should be aware of before investing here.

Switching gears from RWE, 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. 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.