In 2007 Feike Sijbesma was appointed CEO of Koninklijke DSM N.V. (AMS:DSM). 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Feike Sijbesma's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Koninklijke DSM N.V. has a market cap of €18b, and reported total annual CEO compensation of €3.4m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €931k. 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 looked at a group of companies with market capitalizations over €7.2b and the median CEO total compensation was €4.1m. (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.
You can see, below, how CEO compensation at Koninklijke DSM has changed over time.
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 6.7% per year (using a line of best fit). Its revenue is down 1.8% over last year.
I generally like to see a little revenue growth, but the improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.
Has Koninklijke DSM N.V. Been A Good Investment?
Most shareholders would probably be pleased with Koninklijke DSM N.V. for providing a total return of 97% over three years. 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 .
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So we can conclude that on this analysis the CEO compensation seems pretty sound. So you may want to check if insiders are buying Koninklijke DSM shares with their own money (free access).
If you want to buy a stock that is better than Koninklijke DSM, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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