We Take A Look At Why Ferrovial SE's (BME:FER) CEO Compensation Is Well Earned

Key Insights

• Ferrovial to hold its Annual General Meeting on 24th of April
• Salary of €1.45m is part of CEO Ignacio Fernandez's total remuneration
• Total compensation is similar to the industry average
• Ferrovial's total shareholder return over the past three years was 70% while its EPS grew by 58% over the past three years

We've discovered 3 warning signs about Ferrovial. View them for free.

It would be hard to discount the role that CEO Ignacio Fernandez has played in delivering the impressive results at Ferrovial SE (BME:FER) recently. Coming up to the next AGM on 24th of April, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Ferrovial

Comparing Ferrovial SE's CEO Compensation With The Industry

Our data indicates that Ferrovial SE has a market capitalization of €29b, and total annual CEO compensation was reported as €5.7m for the year to December 2024. We note that's an increase of 35% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.5m.

On comparing similar companies in the Spanish Construction industry with market capitalizations above €7.0b, we found that the median total CEO compensation was €5.3m. So it looks like Ferrovial compensates Ignacio Fernandez in line with the median for the industry. Furthermore, Ignacio Fernandez directly owns €5.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	€1.5m	€1.3m	26%
Other	€4.2m	€2.9m	74%
Total Compensation	€5.7m	€4.2m	100%

Talking in terms of the industry, salary represented approximately 34% of total compensation out of all the companies we analyzed, while other remuneration made up 66% of the pie. It's interesting to note that Ferrovial 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 Ferrovial SE's Growth Numbers

Ferrovial SE's earnings per share (EPS) grew 58% per year over the last three years. Its revenue is up 7.4% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Ferrovial SE Been A Good Investment?

We think that the total shareholder return of 70%, over three years, would leave most Ferrovial SE shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Ferrovial (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Ferrovial is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.