Is Sartorius Aktiengesellschaft's (ETR:SRT) CEO Pay Justified?
In 2003 Joachim Kreuzburg was appointed CEO of Sartorius Aktiengesellschaft (ETR:SRT). First, this article will compare CEO compensation with compensation at other large 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 method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Sartorius
How Does Joachim Kreuzburg's Compensation Compare With Similar Sized Companies?
According to our data, Sartorius Aktiengesellschaft has a market capitalization of €14b, and paid its CEO total annual compensation worth €2.1m over the year to December 2019. That's just a smallish increase of 3.1% on last year. While we always look at total compensation first, we note that the salary component is less, at €888k. We took a group of companies with market capitalizations over €7.3b, and calculated the median CEO total compensation to be €4.2m. 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.
You can see, below, how CEO compensation at Sartorius has changed over time.
Is Sartorius Aktiengesellschaft Growing?
On average over the last three years, Sartorius Aktiengesellschaft has grown earnings per share (EPS) by 15% each year (using a line of best fit). It achieved revenue growth of 17% over the 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 Sartorius Aktiengesellschaft Been A Good Investment?
Most shareholders would probably be pleased with Sartorius Aktiengesellschaft for providing a total return of 175% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
It appears that Sartorius Aktiengesellschaft remunerates its CEO below most large companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Joachim Kreuzburg deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. Shareholders may want to check for free if Sartorius insiders are buying or selling shares.
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.
