In 2009 Elmar Degenhart was appointed CEO of Continental Aktiengesellschaft (FRA:CON). This analysis aims first to contrast CEO compensation with other large 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.
How Does Elmar Degenhart’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Continental Aktiengesellschaft has a market cap of €28b, and is paying total annual CEO compensation of €6.6m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at €1.5m. We looked at a group of companies with market capitalizations over €7.0b and the median CEO compensation was €3.9m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
Thus we can conclude that Elmar Degenhart receives more in total compensation than the median of a group of large companies in the same market as Continental Aktiengesellschaft. 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.
The graphic below shows how CEO compensation at Continental has changed from year to year.
Is Continental Aktiengesellschaft Growing?
Over the last three years Continental Aktiengesellschaft has grown its earnings per share (EPS) by an average of 3.7% per year (using a line of best fit). Its revenue is up 2.8% over last year.
I’d prefer higher revenue growth, but I’m happy with the modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Continental Aktiengesellschaft Been A Good Investment?
With a three year total loss of 23%, Continental Aktiengesellschaft would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Continental Aktiengesellschaft with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Continental.
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings 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 firstname.lastname@example.org.