Is CompuGroup Medical Societas Europaea (ETR:COP) Excessively Paying Its CEO?
In 2008 Frank Gotthardt was appointed CEO of CompuGroup Medical Societas Europaea (ETR:COP). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 CompuGroup Medical Societas Europaea
How Does Frank Gotthardt's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that CompuGroup Medical Societas Europaea has a market cap of €2.8b, and reported total annual CEO compensation of €4.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at €800k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from €1.8b to €5.8b, and the median CEO total compensation was €2.3m.
Thus we can conclude that Frank Gotthardt receives more in total compensation than the median of a group of companies in the same market, and of similar size to CompuGroup Medical Societas Europaea. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at CompuGroup Medical Societas Europaea has changed over time.
Is CompuGroup Medical Societas Europaea Growing?
CompuGroup Medical Societas Europaea has increased its earnings per share (EPS) by an average of 33% a year, over the last three years (using a line of best fit). Its revenue is up 9.4% over last year.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has CompuGroup Medical Societas Europaea Been A Good Investment?
Most shareholders would probably be pleased with CompuGroup Medical Societas Europaea for providing a total return of 48% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared total CEO remuneration at CompuGroup Medical Societas Europaea with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling CompuGroup Medical Societas Europaea shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.
