In 2007 Feike Sijbesma was appointed CEO of Koninklijke DSM N.V. (AMS:DSM). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big 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.
How Does Feike Sijbesma's Compensation Compare With Similar Sized Companies?
Our data indicates that Koninklijke DSM N.V. is worth €18b, and total annual CEO compensation is €3.4m. (This number is for the twelve months until December 2018). We note that's an increase of 25% above last year. We think total compensation is more important but we note that the CEO salary is lower, at €931k. We took a group of companies with market capitalizations over €7.1b, and calculated the median CEO total compensation to be €3.7m. (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).
That means Feike Sijbesma receives fairly typical remuneration for the CEO of a large company. 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 Koninklijke DSM has changed from year to year.
Is Koninklijke DSM N.V. Growing?
Over the last three years Koninklijke DSM N.V. has grown its earnings per share (EPS) by an average of 53% per year (using a line of best fit). Its revenue is up 7.4% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. 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 Koninklijke DSM N.V. Been A Good Investment?
I think that the total shareholder return of 113%, over three years, would leave most Koninklijke DSM N.V. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Remuneration for Feike Sijbesma is close enough to the median pay for a CEO of a large company .
The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Koninklijke DSM.
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.
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