Endesa, S.A.'s (BME:ELE) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Endesa's Annual General Meeting to take place on 24th of April
• Salary of €1.00m is part of CEO Jose Bogas Galvez's total remuneration
• The overall pay is comparable to the industry average
• Endesa's EPS declined by 19% over the past three years while total shareholder loss over the past three years was 4.6%

Shareholders will probably not be too impressed with the underwhelming results at Endesa, S.A. (BME:ELE) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 24th of April. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Endesa

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

According to our data, Endesa, S.A. has a market capitalization of €18b, and paid its CEO total annual compensation worth €1.8m over the year to December 2023. That's a slight decrease of 6.6% on the prior year. We note that the salary of €1.00m makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the Spanish Electric Utilities industry with market capitalizations over €7.5b, the reported median total CEO compensation was €1.7m. So it looks like Endesa compensates Jose Bogas Galvez in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€1.0m	€960k	57%
Other	€758k	€922k	43%
Total Compensation	€1.8m	€1.9m	100%

On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Our data reveals that Endesa allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

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

Endesa, S.A. has reduced its earnings per share by 19% a year over the last three years. Its revenue is down 23% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Endesa, S.A. Been A Good Investment?

With a three year total loss of 4.6% for the shareholders, Endesa, S.A. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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. We've identified 4 warning signs for Endesa that investors should be aware of in a dynamic business environment.

Switching gears from Endesa, 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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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.