In This Article:
Bill McDermott became the CEO of SAP SE (FRA:SAP) in 2014. 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.
View our latest analysis for SAP
How Does Bill McDermott’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that SAP SE has a market cap of €105b, and is paying total annual CEO compensation of €13m. That’s less than last year. When we examined a group of companies with market caps over €7.0b, we found that their median CEO compensation was €3.9m.
It would therefore appear that SAP SE pays Bill McDermott 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. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at SAP, below.
Is SAP SE Growing?
SAP SE has increased its earnings per share (EPS) by an average of 11% a year, over the last three years Its revenue is up 3.0% over last year.
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.
It could be important to check this free visual depiction of what analysts expect for the future.
Has SAP SE Been A Good Investment?
SAP SE has served shareholders reasonably well, with a total return of 24% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary…
We compared the total CEO remuneration paid by SAP SE, and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven’t been bad. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.