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Is Brenntag AG’s (ETR:BNR) CEO Pay Justified?

Neil Montgomery

Steve Holland has been the CEO of Brenntag AG (ETR:BNR) since 2011. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

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How Does Steve Holland’s Compensation Compare With Similar Sized Companies?

According to our data, Brenntag AG has a market capitalization of €6.0b, and pays its CEO total annual compensation worth €3.1m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at €950k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of €3.5b to €11b. The median total CEO compensation was €2.5m.

That means Steve Holland receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Brenntag has changed from year to year.

XTRA:BNR CEO Compensation January 13th 19

Is Brenntag AG Growing?

Over the last three years Brenntag AG has grown its earnings per share (EPS) by an average of 2.8% per year (using a line of best fit). It achieved revenue growth of 6.8% over the last year.

I would argue that the improvement in revenue isn’t particularly impressive, but I’m happy with the modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Brenntag AG Been A Good Investment?

Brenntag AG has generated a total shareholder return of 0.5% over three years, so most shareholders wouldn’t be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

Steve Holland is paid around what is normal the leaders of comparable size companies.

We think many would like to see better growth. But we don’t think the CEO compensation is a problem. Whatever your view on compensation, you might want to check if insiders are buying or selling Brenntag shares (free trial).

Or you might prefer examine intently this intuitive graph showing past earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.