Joe Kaeser has been the CEO of Siemens Aktiengesellschaft (FRA:SIE) since 2013. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Joe Kaeser's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Siemens Aktiengesellschaft has a market cap of €84b, and is paying total annual CEO compensation of €7.8m. (This figure is for the year to September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €2.2m. We looked at a group of companies with market capitalizations over €7.2b and the median CEO total compensation was €4.3m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
It would therefore appear that Siemens Aktiengesellschaft pays Joe Kaeser more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Siemens has changed over time.
Is Siemens Aktiengesellschaft Growing?
Over the last three years, Siemens Aktiengesellschaft has not seen its earnings per share change much, though they have deteriorated slightly, according to a line of best fit. In the last year, its revenue changed by just 0.8%.
In the last three years the company has failed to grow earnings per s. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Siemens Aktiengesellschaft Been A Good Investment?
With a total shareholder return of 25% over three years, Siemens Aktiengesellschaft shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by Siemens Aktiengesellschaft, and compared it to remuneration at a group of other large companies. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
And shareholder returns are decent but not great. So we think more research is needed, but we don't think the CEO underpaid. Whatever your view on compensation, you might want to check if insiders are buying or selling Siemens shares (free trial).
Important note: Siemens may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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 firstname.lastname@example.org. 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.