Is MAN SE's (FRA:MAN) CEO Being Overpaid?
Joachim Gerhard Drees has been the CEO of MAN SE (FRA:MAN) since 2015. This analysis aims first to contrast CEO compensation with other large 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. This method should give us information to assess how appropriately the company pays the CEO.
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View our latest analysis for MAN
How Does Joachim Gerhard Drees's Compensation Compare With Similar Sized Companies?
Our data indicates that MAN SE is worth €9.7b, and total annual CEO compensation is €1.9m. (This figure is for the year to December 2018). That's a notable increase of 13% on last year. While we always look at total compensation first, we note that the salary component is less, at €624k. When we examined a group of companies with market caps over €7.1b, we found that their median CEO total compensation was €4.3m. (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).
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at MAN has changed over time.
Is MAN SE Growing?
MAN SE has increased its earnings per share (EPS) by an average of 56% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 9.2%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has MAN SE Been A Good Investment?
Given the total loss of 15% over three years, many shareholders in MAN SE are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
MAN SE is currently paying its CEO below what is normal for large companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. So while we would not say that Joachim Gerhard Drees is generously paid, it would be good to see an improvement in business performance before too an increase in pay.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. Shareholders may want to check for free if MAN insiders are buying or selling shares.
Important note: MAN may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.
