Is Brunello Cucinelli S.p.A.'s (BIT:BC) CEO Paid Enough Relative To Peers?

The CEO of Brunello Cucinelli S.p.A. (BIT:BC) is Brunello Cucinelli. 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 process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Brunello Cucinelli

How Does Brunello Cucinelli's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Brunello Cucinelli S.p.A. has a market cap of €1.8b, and reported total annual CEO compensation of €803k for the year to December 2018. Notably, the salary of €803k is the vast majority of the CEO compensation. When we examined a selection of companies with market caps ranging from €920m to €2.9b, we found the median CEO total compensation was €1.3m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Brunello Cucinelli stands. Speaking on an industry level, we can see that nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. Speaking on a company level, Brunello Cucinelli prefers to tread along a traditional path, disbursing all compensation through a salary.

At first glance this seems like a real positive for shareholders, since Brunello Cucinelli is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business. The graphic below shows how CEO compensation at Brunello Cucinelli has changed from year to year.

Is Brunello Cucinelli S.p.A. Growing?

Over the last three years Brunello Cucinelli S.p.A. has seen earnings per share (EPS) move in a positive direction by an average of 9.8% per year (using a line of best fit). It achieved revenue growth of 9.9% over the last year.

I'd prefer higher revenue growth, but I'm happy with the modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.

Has Brunello Cucinelli S.p.A. Been A Good Investment?

Brunello Cucinelli S.p.A. has served shareholders reasonably well, with a total return of 19% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

It appears that Brunello Cucinelli S.p.A. remunerates its CEO below most similar sized companies.

It's well worth noting that while Brunello Cucinelli is paid less than most company leaders (at companies of similar size), share price performance has been somewhat uninspiring. So shareholders may not be elated, but they shouldn't be worried about the CEO compensation, either. Shifting gears from CEO pay for a second, we've picked out 1 warning sign for Brunello Cucinelli that investors should be aware of in a dynamic business environment.

Important note: Brunello Cucinelli 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.