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Is Carl Zeiss Meditec AG's (ETR:AFX) CEO Paid Enough Relative To Peers?

Simply Wall St

Ludwin Monz became the CEO of Carl Zeiss Meditec AG (ETR:AFX) in 2010. First, this article will compare CEO compensation with compensation at other large 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Carl Zeiss Meditec

How Does Ludwin Monz's Compensation Compare With Similar Sized Companies?

According to our data, Carl Zeiss Meditec AG has a market capitalization of €10b, and paid its CEO total annual compensation worth €1.8m over the year to September 2018. While we always look at total compensation first, we note that the salary component is less, at €400k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations over €7.2b and the median CEO total compensation was €4.2m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).

This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Carl Zeiss Meditec, below.

XTRA:AFX CEO Compensation, December 22nd 2019

Is Carl Zeiss Meditec AG Growing?

Over the last three years Carl Zeiss Meditec AG has grown its earnings per share (EPS) by an average of 7.1% per year (using a line of best fit). Its revenue is up 14% over last year.

I think the revenue growth is good. And the improvement in earnings per share is modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Shareholders might be interested in this free visualization of analyst forecasts.

Has Carl Zeiss Meditec AG Been A Good Investment?

Boasting a total shareholder return of 236% over three years, Carl Zeiss Meditec AG has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

It appears that Carl Zeiss Meditec AG remunerates its CEO below most large companies.

It's well worth noting that while Ludwin Monz is paid below what is normal at large companies, the returns have been very pleasing, over the last three years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. Shareholders may want to check for free if Carl Zeiss Meditec insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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