Should You Worry About Banca Popolare di Sondrio S.C.p.A.'s (BIT:BPSO) CEO Pay Cheque?

Mario Pedranzini has been the CEO of Banca Popolare di Sondrio S.C.p.A. (BIT:BPSO) since 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Banca Popolare di Sondrio S.C.p.A

How Does Mario Pedranzini's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Banca Popolare di Sondrio S.C.p.A. has a market cap of €664m, and reported total annual CEO compensation of €1.4m for the year to December 2018. When we examined a selection of companies with market caps ranging from €371m to €1.5b, we found the median CEO total compensation was €830k.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Banca Popolare di Sondrio S.C.p.A. On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. Readers will want to know that Banca Popolare di Sondrio S.C.p.A pays a modest slice of remuneration through salary, as compared to the wider sector.

As you can see, Mario Pedranzini is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Banca Popolare di Sondrio S.C.p.A. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at Banca Popolare di Sondrio S.C.p.A has changed from year to year.

Is Banca Popolare di Sondrio S.C.p.A. Growing?

On average over the last three years, Banca Popolare di Sondrio S.C.p.A. has seen earnings per share (EPS) move in a favourable direction by 11% each year (using a line of best fit). Its revenue is up 9.7% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Banca Popolare di Sondrio S.C.p.A. Been A Good Investment?

Since shareholders would have lost about 52% over three years, some Banca Popolare di Sondrio S.C.p.A. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Banca Popolare di Sondrio S.C.p.A. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. On another note, Banca Popolare di Sondrio S.C.p.A has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

Important note: Banca Popolare di Sondrio S.C.p.A 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.