Why We Think ENCE Energía y Celulosa, S.A.'s (BME:ENC) CEO Compensation Is Not Excessive At All

Key Insights

• ENCE Energía y Celulosa will host its Annual General Meeting on 4th of April
• Salary of €135.0k is part of CEO Ignacio de Colmenares y Brunet's total remuneration
• Total compensation is 35% below industry average
• Over the past three years, ENCE Energía y Celulosa's EPS grew by 79% and over the past three years, the total loss to shareholders 5.0%

Shareholders may be wondering what CEO Ignacio de Colmenares y Brunet plans to do to improve the less than great performance at ENCE Energía y Celulosa, S.A. (BME:ENC) recently. At the next AGM coming up on 4th of April, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for ENCE Energía y Celulosa

How Does Total Compensation For Ignacio de Colmenares y Brunet Compare With Other Companies In The Industry?

Our data indicates that ENCE Energía y Celulosa, S.A. has a market capitalization of €782m, and total annual CEO compensation was reported as €135k for the year to December 2023. There was no change in the compensation compared to last year. Notably, the salary of €135k is the entirety of the CEO compensation.

On examining similar-sized companies in the Spain Forestry industry with market capitalizations between €371m and €1.5b, we discovered that the median CEO total compensation of that group was €208k. Accordingly, ENCE Energía y Celulosa pays its CEO under the industry median.

Component	2023	2022	Proportion (2023)
Salary	€135k	€135k	100%
Other	-	-	-
Total Compensation	€135k	€135k	100%

Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. Speaking on a company level, ENCE Energía y Celulosa prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at ENCE Energía y Celulosa, S.A.'s Growth Numbers

Over the past three years, ENCE Energía y Celulosa, S.A. has seen its earnings per share (EPS) grow by 79% per year. In the last year, its revenue is down 17%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has ENCE Energía y Celulosa, S.A. Been A Good Investment?

Given the total shareholder loss of 5.0% over three years, many shareholders in ENCE Energía y Celulosa, S.A. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

ENCE Energía y Celulosa pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The lacklustre share price returns is rather divergent to the robust growth in EPS, suggesting that there may be other factors weighing on it apart from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ENCE Energía y Celulosa (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.