This Is Why Eurohold Bulgaria AD's (BUL:EUBG) CEO Compensation Looks Appropriate

Simply Wall St
June 23, 2021
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Shareholders may be wondering what CEO Asen Minchev plans to do to improve the less than great performance at Eurohold Bulgaria AD (BUL:EUBG) recently. At the next AGM coming up on 30 June 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Eurohold Bulgaria AD

Comparing Eurohold Bulgaria AD's CEO Compensation With the industry

At the time of writing, our data shows that Eurohold Bulgaria AD has a market capitalization of лв494m, and reported total annual CEO compensation of лв253k for the year to December 2020. We note that's a small decrease of 6.4% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth лв253k.

On examining similar-sized companies in the industry with market capitalizations between лв327m and лв1.3b, we discovered that the median CEO total compensation of that group was лв1.1m. In other words, Eurohold Bulgaria AD pays its CEO lower than the industry median.

Component20202019Proportion (2020)
Salary лв253k лв270k 100%
Other - - -
Total Compensationлв253k лв270k100%

Talking in terms of the industry, salary represented approximately 46% of total compensation out of all the companies we analyzed, while other remuneration made up 54% of the pie. At the company level, Eurohold Bulgaria AD pays Asen Minchev solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

BUL:EUBG CEO Compensation June 24th 2021

Eurohold Bulgaria AD's Growth

Over the last three years, Eurohold Bulgaria AD has shrunk its earnings per share by 109% per year. Its revenue is down 2.5% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Eurohold Bulgaria AD Been A Good Investment?

Most shareholders would probably be pleased with Eurohold Bulgaria AD for providing a total return of 70% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Eurohold Bulgaria AD pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Eurohold Bulgaria AD.

Switching gears from Eurohold Bulgaria AD, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.
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