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In 2014 Reiner Winkler was appointed CEO of MTU Aero Engines AG (ETR:MTX). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Reiner Winkler's Compensation Compare With Similar Sized Companies?
Our data indicates that MTU Aero Engines AG is worth €11b, and total annual CEO compensation is €2.8m. (This is based on the year to December 2018). That's a notable increase of 24% on last year. While we always look at total compensation first, we note that the salary component is less, at €788k. We looked at a group of companies with market capitalizations over €7.1b and the median CEO total compensation was €4.3m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at MTU Aero Engines has changed from year to year.
Is MTU Aero Engines AG Growing?
On average over the last three years, MTU Aero Engines AG has grown earnings per share (EPS) by 16% each year (using a line of best fit). In the last year, its revenue is up 28%.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. 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 154% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
It looks like MTU Aero Engines AG pays its CEO less than the average at large companies. Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think 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. So you may want to check if insiders are buying MTU Aero Engines shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 email@example.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.