Marco Palmieri is the CEO of Piquadro S.p.A. (BIT:PQ), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Piquadro.
See our latest analysis for Piquadro
How Does Total Compensation For Marco Palmieri Compare With Other Companies In The Industry?
According to our data, Piquadro S.p.A. has a market capitalization of €75m, and paid its CEO total annual compensation worth €559k over the year to March 2020. We note that's a small decrease of 4.6% on last year. In particular, the salary of €500.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below €164m, we found that the median total CEO compensation was €180k. Hence, we can conclude that Marco Palmieri is remunerated higher than the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | €500k | €500k | 89% |
| Other | €59k | €86k | 11% |
| Total Compensation | €559k | €586k | 100% |
Speaking on an industry level, nearly 88% of total compensation represents salary, while the remainder of 12% is other remuneration. There isn't a significant difference between Piquadro and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Piquadro S.p.A.'s Growth Numbers
Piquadro S.p.A. has reduced its earnings per share by 56% a year over the last three years. Its revenue is down 22% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Piquadro S.p.A. Been A Good Investment?
Given the total shareholder loss of 15% over three years, many shareholders in Piquadro S.p.A. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As previously discussed, Marco is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Piquadro you should be aware of, and 2 of them are concerning.
Important note: Piquadro is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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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About BIT:PQ
Piquadro
Designs, manufactures, sells, and markets leather accessories and travel products in Italy and internationally.
Flawless balance sheet with solid track record and pays a dividend.
