We Discuss Why Dermapharm Holding SE's (ETR:DMP) CEO Compensation May Be Closely Reviewed

Key Insights

• Dermapharm Holding's Annual General Meeting to take place on 26th of June
• Salary of €850.0k is part of CEO Hans-Georg Feldmeier's total remuneration
• The overall pay is 346% above the industry average
• Dermapharm Holding's three-year loss to shareholders was 20% while its EPS was down 21% over the past three years

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The results at Dermapharm Holding SE (ETR:DMP) have been quite disappointing recently and CEO Hans-Georg Feldmeier bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 26th of June. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Dermapharm Holding

How Does Total Compensation For Hans-Georg Feldmeier Compare With Other Companies In The Industry?

According to our data, Dermapharm Holding SE has a market capitalization of €1.9b, and paid its CEO total annual compensation worth €1.4m over the year to December 2024. This means that the compensation hasn't changed much from last year. Notably, the salary which is €850.0k, represents most of the total compensation being paid.

For comparison, other companies in the German Pharmaceuticals industry with market capitalizations ranging between €870m and €2.8b had a median total CEO compensation of €317k. Accordingly, our analysis reveals that Dermapharm Holding SE pays Hans-Georg Feldmeier north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	€850k	€821k	60%
Other	€566k	€554k	40%
Total Compensation	€1.4m	€1.4m	100%

Speaking on an industry level, nearly 53% of total compensation represents salary, while the remainder of 47% is other remuneration. Dermapharm Holding is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Dermapharm Holding SE's Growth

Over the last three years, Dermapharm Holding SE has shrunk its earnings per share by 21% per year. Its revenue is up 6.2% over the last year.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Dermapharm Holding SE Been A Good Investment?

Since shareholders would have lost about 20% over three years, some Dermapharm Holding SE investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is significant) in Dermapharm Holding we think you should know about.

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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.