Why We Think Viscofan, S.A.'s (BME:VIS) CEO Compensation Is Not Excessive At All

Key Insights

• Viscofan to hold its Annual General Meeting on 17th of April
• Salary of €816.0k is part of CEO Jose de Ampuero y Osma's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Viscofan's EPS grew by 5.0% and over the past three years, the total shareholder return was 7.9%

CEO Jose de Ampuero y Osma has done a decent job of delivering relatively good performance at Viscofan, S.A. (BME:VIS) recently. As shareholders go into the upcoming AGM on 17th of April, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for Viscofan

Comparing Viscofan, S.A.'s CEO Compensation With The Industry

According to our data, Viscofan, S.A. has a market capitalization of €2.7b, and paid its CEO total annual compensation worth €1.2m over the year to December 2023. There was no change in the compensation compared to last year. Notably, the salary which is €816.0k, represents most of the total compensation being paid.

In comparison with other companies in the Spain Food industry with market capitalizations ranging from €1.9b to €6.0b, the reported median CEO total compensation was €1.5m. This suggests that Viscofan remunerates its CEO largely in line with the industry average. Furthermore, Jose de Ampuero y Osma directly owns €4.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	€816k	€816k	68%
Other	€386k	€386k	32%
Total Compensation	€1.2m	€1.2m	100%

Talking in terms of the industry, salary represented approximately 55% of total compensation out of all the companies we analyzed, while other remuneration made up 45% of the pie. Viscofan pays out 68% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Viscofan, S.A.'s Growth Numbers

Over the past three years, Viscofan, S.A. has seen its earnings per share (EPS) grow by 5.0% per year. Its revenue is up 2.1% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Viscofan, S.A. Been A Good Investment?

Viscofan, S.A. has generated a total shareholder return of 7.9% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Viscofan that you should be aware of before investing.

Important note: Viscofan 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.