Should You Be Pleased About The CEO Pay At Foraco International SA's (TSE:FAR)

Daniel Simoncini became the CEO of Foraco International SA (TSE:FAR) in 1997. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Foraco International

How Does Daniel Simoncini's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Foraco International SA has a market cap of CA$22m, and reported total annual CEO compensation of S$1.3m for the year to December 2019. That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at S$1.0m. We took a group of companies with market capitalizations below S$284m, and calculated the median CEO total compensation to be S$223k.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Foraco International stands. On a sector level, around 91% of total compensation represents salary and 9.1% is other remuneration. Foraco International is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation

It would therefore appear that Foraco International SA pays Daniel Simoncini more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You can see, below, how CEO compensation at Foraco International has changed over time.

Is Foraco International SA Growing?

Foraco International SA has seen earnings per share (EPS) move positively by an average of 49% a year, over the last three years (using a line of best fit). Its revenue is up 13% over last year.

This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Foraco International SA Been A Good Investment?

Given the total loss of 38% over three years, many shareholders in Foraco International SA are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount Foraco International SA pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. Considering positive per-share earnings movement, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Taking a breather from CEO compensation, we've spotted 3 warning signs for Foraco International (of which 1 can't be ignored!) you should know about in order to have a holistic understanding of the stock.

Important note: Foraco International may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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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. Thank you for reading.