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Is MTU Aero Engines AG (ETR:MTX) Excessively Paying Its CEO?

Reiner Winkler has been the CEO of MTU Aero Engines AG (ETR:MTX) since 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for MTU Aero Engines

How Does Reiner Winkler’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that MTU Aero Engines AG has a market cap of €9.4b, and is paying total annual CEO compensation of €2m. That’s less than last year. When we examined a group of companies with market caps over €7.1b, we found that their median CEO compensation was €4m.

A first glance this seems like a real positive for shareholders, since Reiner Winkler is paid less than the average compensation paid by other large companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at MTU Aero Engines has changed over time.

XTRA:MTX CEO Compensation November 11th 18

Is MTU Aero Engines AG Growing?

Over the last three years MTU Aero Engines AG has grown its earnings per share (EPS) by an average of 21% per year. Its revenue is up 18% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.

You might want to check this free visual report on analyst forecasts for future earnings.

Has MTU Aero Engines AG Been A Good Investment?

Most shareholders would probably be pleased with MTU Aero Engines AG for providing a total return of 122% over three years. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.

In Summary…

It appears that MTU Aero Engines AG remunerates its CEO below most large companies. Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Reiner Winkler deserves a raise!

It is relatively rare to see a modestly paid CEO when performance is so impressive. The cherry on top would be if company insiders are 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 MTU Aero Engines AG.

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

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.