Yahoo Finance We Think Mercedes-Benz Group AG's (ETR:MBG) CEO Compensation Looks Fair
Key Insights
Mercedes-Benz Group will host its Annual General Meeting on 8th of May
Salary of €1.77m is part of CEO Ola Kallenius's total remuneration
The overall pay is comparable to the industry average
Over the past three years, Mercedes-Benz Group's EPS grew by 59% and over the past three years, the total shareholder return was 36%
The performance at Mercedes-Benz Group AG (ETR:MBG) has been quite strong recently and CEO Ola Kallenius has played a role in it. Coming up to the next AGM on 8th of May, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
See our latest analysis for Mercedes-Benz Group
Comparing Mercedes-Benz Group AG's CEO Compensation With The Industry
According to our data, Mercedes-Benz Group AG has a market capitalization of €73b, and paid its CEO total annual compensation worth €6.8m over the year to December 2023. Notably, that's an increase of 12% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.8m.
In comparison with other companies in the German Auto industry with market capitalizations over €7.5b, the reported median total CEO compensation was €6.8m. So it looks like Mercedes-Benz Group compensates Ola Kallenius in line with the median for the industry.
Component | 2023 | 2022 | Proportion (2023) |
Salary | €1.8m | €1.7m | 26% |
Other | €5.1m | €4.4m | 74% |
Total Compensation | €6.8m | €6.1m | 100% |
Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. Although there is a difference in how total compensation is set, Mercedes-Benz Group more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Mercedes-Benz Group AG's Growth Numbers
Mercedes-Benz Group AG has seen its earnings per share (EPS) increase by 59% a year over the past three years. In the last year, its revenue is up 2.1%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Mercedes-Benz Group AG Been A Good Investment?
Boasting a total shareholder return of 36% over three years, Mercedes-Benz Group AG has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for Mercedes-Benz Group you should be aware of, and 2 of them are a bit concerning.
Important note: Mercedes-Benz Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
