In 2016 Jesús Martin-Garcia was appointed CEO of GeNeuro SA (EPA:GNRO). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jesús Martin-Garcia’s Compensation Compare With Similar Sized Companies?
According to our data, GeNeuro SA has a market capitalization of €55m, and paid its CEO total annual compensation worth €694k over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at €346k. We examined a group of similar sized companies, with market capitalizations of below €182m. The median CEO total compensation in that group is €154k.
Thus we can conclude that Jesús Martin-Garcia receives more in total compensation than the median of a group of companies in the same market, and of similar size to GeNeuro SA. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. Shareholders might be interested in this free visualization of analyst forecasts.
The graphic below shows how CEO compensation at GeNeuro has changed from year to year.
Is GeNeuro SA Growing?
On average over the last three years, GeNeuro SA has grown earnings per share (EPS) by 23% each year (using a line of best fit). It saw its revenue drop 50% over the last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.
Has GeNeuro SA Been A Good Investment?
Given the total loss of 49% over three years, many shareholders in GeNeuro SA are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by GeNeuro SA, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at GeNeuro.
Important note: GeNeuro may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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