Key Insights

• freenet's Annual General Meeting to take place on 8th of May

• CEO Christoph Vilanek's total compensation includes salary of €1.02m

• Total compensation is 43% above industry average

• freenet's total shareholder return over the past three years was 56% while its EPS was down 5.3% over the past three years

freenet AG (ETR:FNTN) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 8th of May. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for freenet

Comparing freenet AG's CEO Compensation With The Industry

According to our data, freenet AG has a market capitalization of €3.1b, and paid its CEO total annual compensation worth €5.7m over the year to December 2023. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.0m.

On examining similar-sized companies in the Germany Wireless Telecom industry with market capitalizations between €1.9b and €6.0b, we discovered that the median CEO total compensation of that group was €4.0m. Accordingly, our analysis reveals that freenet AG pays Christoph Vilanek north of the industry median.

Speaking on an industry level, nearly 32% of total compensation represents salary, while the remainder of 68% is other remuneration. In freenet's case, non-salary compensation represents a greater slice of total remuneration, 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 freenet AG's Growth Numbers

Over the last three years, freenet AG has shrunk its earnings per share by 5.3% per year. It achieved revenue growth of 2.7% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. 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..