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Is QSC AG (ETR:QSC) Overpaying Its CEO?

Simply Wall St

Jürgen Hermann became the CEO of QSC AG (ETR:QSC) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for QSC

How Does Jürgen Hermann's Compensation Compare With Similar Sized Companies?

According to our data, QSC AG has a market capitalization of €167m, and paid its CEO total annual compensation worth €585k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €300k. We looked at a group of companies with market capitalizations from €92m to €370m, and the median CEO total compensation was €574k.

So Jürgen Hermann is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at QSC has changed from year to year.

XTRA:QSC CEO Compensation, February 19th 2020

Is QSC AG Growing?

QSC AG has increased its earnings per share (EPS) by an average of 138% a year, over the last three years (using a line of best fit). It saw its revenue drop 19% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.

Has QSC AG Been A Good Investment?

With a three year total loss of 19%, QSC AG would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Jürgen Hermann is paid around what is normal the leaders of comparable size companies.

We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at QSC.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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. Thank you for reading.