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Does RWE Aktiengesellschaft's (FRA:RWE) CEO Salary Reflect Performance?

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Rolf Schmitz became the CEO of RWE Aktiengesellschaft (FRA:RWE) in 2016. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for RWE

How Does Rolf Schmitz's Compensation Compare With Similar Sized Companies?

Our data indicates that RWE Aktiengesellschaft is worth €15b, and total annual CEO compensation is €4.1m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €1.2m. When we examined a group of companies with market caps over €7.1b, we found that their 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.

That means Rolf Schmitz receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at RWE, below.

DB:RWE CEO Compensation, July 19th 2019
DB:RWE CEO Compensation, July 19th 2019

Is RWE Aktiengesellschaft Growing?

Over the last three years RWE Aktiengesellschaft has grown its earnings per share (EPS) by an average of 43% per year (using a line of best fit). In the last year, its revenue is up 2.6%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has RWE Aktiengesellschaft Been A Good Investment?

I think that the total shareholder return of 73%, over three years, would leave most RWE Aktiengesellschaft shareholders smiling. 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...

Rolf Schmitz is paid around what is normal the leaders of larger companies.

The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling RWE (free visualization of insider trades).

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.

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 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.