Bernd Scheifele has been the CEO of HeidelbergCement AG (FRA:HEI) since 2005. 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. 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.
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How Does Bernd Scheifele’s Compensation Compare With Similar Sized Companies?
Our data indicates that HeidelbergCement AG is worth €11b, and total annual CEO compensation is €7.1m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at €1.5m. When we examined a group of companies with market caps over €7.0b, we found that their median CEO compensation was €3.9m. (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).
As you can see, Bernd Scheifele is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean HeidelbergCement AG is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at HeidelbergCement, below.
Is HeidelbergCement AG Growing?
HeidelbergCement AG has increased its earnings per share (EPS) by an average of 5.6% a year, over the last three years (using a line of best fit). Its revenue is up 2.3% over last year.
I would argue that the improvement in revenue isn’t particularly impressive, but I’m happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise.
It could be important to check this free visual depiction of what analysts expect for the future.
Has HeidelbergCement AG Been A Good Investment?
Since shareholders would have lost about 6.1% over three years, some HeidelbergCement AG shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared the total CEO remuneration paid by HeidelbergCement AG, and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of 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. Whatever your view on compensation, you might want to check if insiders are buying or selling HeidelbergCement shares (free trial).
Or you might prefer examine intently this intuitive graph showing past 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 email@example.com.