U.S. Markets closed

Is Delticom AG’s (ETR:DEX) CEO Salary Justified?

In 2014 Andreas Prüfer was appointed CEO of Delticom AG (ETR:DEX). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 Delticom

How Does Andreas Prüfer’s Compensation Compare With Similar Sized Companies?

According to our data, Delticom AG has a market capitalization of €102m, and pays its CEO total annual compensation worth €561k. That’s a notable increase of 11% on last year. We took a group of companies with market capitalizations below €176m, and calculated the median CEO compensation to be €258k.

As you can see, Andreas Prüfer is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Delticom AG is paying too much. 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 Delticom has changed over time.

XTRA:DEX CEO Compensation November 13th 18

Is Delticom AG Growing?

On average over the last three years, Delticom AG has shrunk earnings per share by 20% each year. It achieved revenue growth of 5.2% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

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

Has Delticom AG Been A Good Investment?

With a three year total loss of 60%, Delticom AG would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared the total CEO remuneration paid by Delticom AG, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Arguably worse, investors are without a positive return for the last three years. And we’d be remiss not to note that the CEO remuneration has increased on last year. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Delticom AG.

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow 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.