Shareholders will probably not be too impressed with the underwhelming results at Banco Santander, S.A. (BME:SAN) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 26 March 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.
How Does Total Compensation For Jose Antonio Alvarez Alvarez Compare With Other Companies In The Industry?
According to our data, Banco Santander, S.A. has a market capitalization of €52b, and paid its CEO total annual compensation worth €6.0m over the year to December 2020. That's a notable decrease of 27% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €2.5m.
In comparison with other companies in the industry with market capitalizations over €6.7b , the reported median total CEO compensation was €2.4m. This suggests that Jose Antonio Alvarez Alvarez is paid more than the median for the industry. Moreover, Jose Antonio Alvarez Alvarez also holds €5.3m worth of Banco Santander stock directly under their own name.
Talking in terms of the industry, salary represented approximately 81% of total compensation out of all the companies we analyzed, while other remuneration made up 19% of the pie. It's interesting to note that Banco Santander allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Banco Santander, S.A.'s Growth
Over the last three years, Banco Santander, S.A. has shrunk its earnings per share by 77% per year. In the last year, its revenue is down 22%.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Banco Santander, S.A. Been A Good Investment?
The return of -37% over three years would not have pleased Banco Santander, S.A. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Banco Santander that you should be aware of before investing.
Switching gears from Banco Santander, 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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