Is RHÖN-KLINIKUM Aktiengesellschaft's (FRA:RHK) CEO Pay Fair?
In 2017 Stephan Holzinger was appointed CEO of RHÖN-KLINIKUM Aktiengesellschaft (FRA:RHK). First, this article will compare CEO compensation with compensation at similar sized 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 method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for RHÖN-KLINIKUM
How Does Stephan Holzinger's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that RHÖN-KLINIKUM Aktiengesellschaft has a market cap of €1.5b, and is paying total annual CEO compensation of €2.3m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at €1.8m. We looked at a group of companies with market capitalizations from €902m to €2.9b, and the median CEO total compensation was €1.4m.
As you can see, Stephan Holzinger is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean RHÖN-KLINIKUM Aktiengesellschaft is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at RHÖN-KLINIKUM has changed over time.
Is RHÖN-KLINIKUM Aktiengesellschaft Growing?
RHÖN-KLINIKUM Aktiengesellschaft has reduced its earnings per share by an average of 19% a year, over the last three years (measured with a line of best fit). Its revenue is up 5.7% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has RHÖN-KLINIKUM Aktiengesellschaft Been A Good Investment?
Since shareholders would have lost about 8.8% over three years, some RHÖN-KLINIKUM Aktiengesellschaft shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We examined the amount RHÖN-KLINIKUM Aktiengesellschaft pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling RHÖN-KLINIKUM (free visualization of insider trades).
If you want to buy a stock that is better than RHÖN-KLINIKUM, this free list of high return, low debt companies is a great place to look.
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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.
