Markus Haas has been the CEO of Telefónica Deutschland Holding AG (ETR:O2D) since 2017. 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 process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Telefónica Deutschland Holding
How Does Markus Haas's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Telefónica Deutschland Holding AG has a market cap of €7.4b, and reported total annual CEO compensation of €2.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €700k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from €3.7b to €11b, we found the median CEO total compensation was €3.3m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Telefónica Deutschland Holding, below.
Is Telefónica Deutschland Holding AG Growing?
Telefónica Deutschland Holding AG has reduced its earnings per share by an average of 26% a year, over the last three years (measured with a line of best fit). Its revenue is up 1.8% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Telefónica Deutschland Holding AG Been A Good Investment?
Since shareholders would have lost about 13% over three years, some Telefónica Deutschland Holding AG shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
It looks like Telefónica Deutschland Holding AG pays its CEO less than similar sized companies.
The compensation paid to Markus Haas is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. Whatever your view on compensation, you might want to check if insiders are buying or selling Telefónica Deutschland Holding shares (free trial).