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Is Hapag-Lloyd Aktiengesellschaft's (ETR:HLAG) CEO Pay Justified?

Simply Wall St

Rolf Jansen became the CEO of Hapag-Lloyd Aktiengesellschaft (ETR:HLAG) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. 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.

Check out our latest analysis for Hapag-Lloyd

How Does Rolf Jansen's Compensation Compare With Similar Sized Companies?

Our data indicates that Hapag-Lloyd Aktiengesellschaft is worth €12b, and total annual CEO compensation was reported as €2.1m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €750k. 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 took a group of companies with market capitalizations over €7.2b, and calculated the median CEO total compensation to be €4.1m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at Hapag-Lloyd has changed from year to year.

XTRA:HLAG CEO Compensation, November 8th 2019

Is Hapag-Lloyd Aktiengesellschaft Growing?

On average over the last three years, Hapag-Lloyd Aktiengesellschaft has grown earnings per share (EPS) by 125% each year (using a line of best fit). It achieved revenue growth of 13% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Hapag-Lloyd Aktiengesellschaft Been A Good Investment?

Boasting a total shareholder return of 292% over three years, Hapag-Lloyd Aktiengesellschaft 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...

Hapag-Lloyd Aktiengesellschaft is currently paying its CEO below what is normal for large companies.

Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Rolf Jansen deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Hapag-Lloyd.

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.

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.