How Should Investors React To Mediobanca Banca di Credito Finanziario's (BIT:MB) CEO Pay?

This article will reflect on the compensation paid to Alberto Nagel who has served as CEO of Mediobanca Banca di Credito Finanziario S.p.A. (BIT:MB) since 2008. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Mediobanca Banca di Credito Finanziario.

See our latest analysis for Mediobanca Banca di Credito Finanziario

How Does Total Compensation For Alberto Nagel Compare With Other Companies In The Industry?

Our data indicates that Mediobanca Banca di Credito Finanziario S.p.A. has a market capitalization of €6.5b, and total annual CEO compensation was reported as €4.0m for the year to June 2020. We note that's an increase of 21% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.8m.

In comparison with other companies in the industry with market capitalizations ranging from €3.3b to €9.9b, the reported median CEO total compensation was €1.0m. Hence, we can conclude that Alberto Nagel is remunerated higher than the industry median. Furthermore, Alberto Nagel directly owns €22m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. In Mediobanca Banca di Credito Finanziario's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Mediobanca Banca di Credito Finanziario S.p.A.'s Growth

Over the last three years, Mediobanca Banca di Credito Finanziario S.p.A. has shrunk its earnings per share by 12% per year. In the last year, its revenue is down 11%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Mediobanca Banca di Credito Finanziario S.p.A. Been A Good Investment?

With a three year total loss of 14% for the shareholders, Mediobanca Banca di Credito Finanziario S.p.A. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Mediobanca Banca di Credito Finanziario S.p.A. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Mediobanca Banca di Credito Finanziario (free visualization of insider trades).

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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. 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.
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