Repsol, S.A. (BME:REP) has not performed well recently and CEO Josu Jon Imaz San Miguel will probably need to up their game. 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. We present the case why we think CEO compensation is out of sync with company performance.
How Does Total Compensation For Josu Jon Imaz San Miguel Compare With Other Companies In The Industry?
According to our data, Repsol, S.A. has a market capitalization of €17b, and paid its CEO total annual compensation worth €3.7m over the year to December 2020. That's slightly lower by 3.7% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.2m.
For comparison, other companies in the industry with market capitalizations above €6.7b, reported a median total CEO compensation of €3.7m. This suggests that Repsol remunerates its CEO largely in line with the industry average. Moreover, Josu Jon Imaz San Miguel also holds €4.5m worth of Repsol stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 62% of total compensation out of all the companies we analyzed, while other remuneration made up 38% of the pie. In Repsol'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 Repsol, S.A.'s Growth Numbers
Over the last three years, Repsol, S.A. has shrunk its earnings per share by 102% per year. Its revenue is down 33% over the previous year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Repsol, S.A. Been A Good Investment?
With a three year total loss of 9.5% for the shareholders, Repsol, S.A. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Repsol that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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