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Is adesso SE's (ETR:ADN1) CEO Pay Fair?

Simply Wall St

Michael Kenfenheuer became the CEO of adesso SE (ETR:ADN1) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for adesso

How Does Michael Kenfenheuer's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that adesso SE has a market cap of €301m, and reported total annual CEO compensation of €739k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €242k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of €182m to €727m. The median total CEO compensation was €983k.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 49% of total compensation represents salary and 51% is other remuneration. adesso sets aside a smaller share of compensation for salary, in comparison to the overall industry.

That means Michael Kenfenheuer receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see a visual representation of the CEO compensation at adesso, below.

XTRA:ADN1 CEO Compensation May 3rd 2020

Is adesso SE Growing?

On average over the last three years, adesso SE has seen earnings per share (EPS) move in a favourable direction by 9.6% each year (using a line of best fit). It achieved revenue growth of 19% over the last year.

This revenue growth could really point to a brighter future. And the improvement in earnings per share is modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. You might want to check this free visual report on analyst forecasts for future earnings.

Has adesso SE Been A Good Investment?

Since shareholders would have lost about 9.3% over three years, some adesso SE shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Michael Kenfenheuer is paid around the same as most CEOs of similar size companies.

The per share growth could be better, in our view. And we think the shareholder returns - over three years - have been underwhelming. So many would argue that the CEO is certainly not underpaid. On another note, we've spotted 2 warning signs for adesso that investors should look into moving forward.

If you want to buy a stock that is better than adesso, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.