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Is Deutsche Post AG (ETR:DPW) Overpaying Its CEO?

Becky Mayes

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Frank Appel became the CEO of Deutsche Post AG (ETR:DPW) in 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Deutsche Post

How Does Frank Appel’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Deutsche Post AG has a market cap of €33b, and is paying total annual CEO compensation of €6.4m. (This figure is for the year to December 2016). We think total compensation is more important but we note that the CEO salary is lower, at €2.0m. When we examined a group of companies with market caps over €7.1b, we found that their median CEO compensation was €4.1m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

As you can see, Frank Appel is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Deutsche Post AG is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Deutsche Post, below.

XTRA:DPW CEO Compensation, February 23rd 2019

Is Deutsche Post AG Growing?

Deutsche Post AG has increased its earnings per share (EPS) by an average of 15% a year, over the last three years (using a line of best fit). Its revenue is up 1.9% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.

Has Deutsche Post AG Been A Good Investment?

Boasting a total shareholder return of 34% over three years, Deutsche Post 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…

We compared the total CEO remuneration paid by Deutsche Post AG, and compared it to remuneration at a group of other large companies. Our data suggests that it pays above the median CEO pay within 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. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Deutsche Post.

Important note: Deutsche Post may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.