In the past three years, shareholders of Diebold Nixdorf, Incorporated (NYSE:DBD) have seen a loss on their investment. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 30 April 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
How Does Total Compensation For Gerrard Schmid Compare With Other Companies In The Industry?
According to our data, Diebold Nixdorf, Incorporated has a market capitalization of US$1.1b, and paid its CEO total annual compensation worth US$5.3m over the year to December 2020. We note that's a decrease of 18% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$950k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$464k. Hence, we can conclude that Gerrard Schmid is remunerated higher than the industry median. What's more, Gerrard Schmid holds US$2.3m worth of shares in the company in their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$950k | US$950k | 18% |
| Other | US$4.4m | US$5.5m | 82% |
| Total Compensation | US$5.3m | US$6.5m | 100% |
On an industry level, roughly 26% of total compensation represents salary and 74% is other remuneration. It's interesting to note that Diebold Nixdorf allocates a smaller portion of compensation to salary in comparison to the broader industry. 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 Diebold Nixdorf, Incorporated's Growth Numbers
Over the past three years, Diebold Nixdorf, Incorporated has seen its earnings per share (EPS) grow by 7.7% per year. It saw its revenue drop 11% over the last year.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Diebold Nixdorf, Incorporated Been A Good Investment?
With a three year total loss of 12% for the shareholders, Diebold Nixdorf, Incorporated would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Diebold Nixdorf (1 is a bit concerning!) that you should be aware of before investing here.
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.
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. 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.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
