How Should Investors React To MERCK Kommanditgesellschaft auf Aktien’s (FRA:MRK) CEO Pay?
In 2016 Stefan Oschmann was appointed CEO of MERCK Kommanditgesellschaft auf Aktien (FRA:MRK). 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for MERCK Kommanditgesellschaft auf Aktien
How Does Stefan Oschmann’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that MERCK Kommanditgesellschaft auf Aktien has a market cap of €38.2b, and is paying total annual CEO compensation of €9m. That’s a notable increase of 25% on last year. We took a group of companies with market capitalizations over €7.0b, and calculated the median CEO compensation to be €4m.
Thus we can conclude that Stefan Oschmann receives more in total compensation than the median of a group of large companies in the same market as MERCK Kommanditgesellschaft auf Aktien. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at MERCK Kommanditgesellschaft auf Aktien has changed from year to year.
Is MERCK Kommanditgesellschaft auf Aktien Growing?
On average over the last three years, MERCK Kommanditgesellschaft auf Aktien has grown earnings per share (EPS) by 27% each year. It achieved revenue growth of 1.8% over the 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.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has MERCK Kommanditgesellschaft auf Aktien Been A Good Investment?
MERCK Kommanditgesellschaft auf Aktien has not done too badly by shareholders, with a total return of 5.9%, over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary…
We compared total CEO remuneration at MERCK Kommanditgesellschaft auf Aktien with the amount paid at other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. So you may want to check if insiders are buying MERCK Kommanditgesellschaft auf Aktien shares with their own money (free access).
Or you might rather take a peek at this analytical visualization of historic cash flow, 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 editorial-team@simplywallst.com.
