Shareholders May Not Be So Generous With Gefran S.p.A.'s (BIT:GE) CEO Compensation And Here's Why

Key Insights

• Gefran will host its Annual General Meeting on 29th of April
• CEO Marcello Perini's total compensation includes salary of €355.4k
• The overall pay is 64% above the industry average
• Gefran's total shareholder return over the past three years was 7.3% while its EPS was down 6.3% over the past three years

We've discovered 1 warning sign about Gefran. View them for free.

Despite Gefran S.p.A.'s (BIT:GE) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 29th of April. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for Gefran

Comparing Gefran S.p.A.'s CEO Compensation With The Industry

At the time of writing, our data shows that Gefran S.p.A. has a market capitalization of €124m, and reported total annual CEO compensation of €511k for the year to December 2024. That's a notable increase of 8.6% on last year. In particular, the salary of €355.4k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Italy Electronic industry with market capitalizations below €173m, we found that the median total CEO compensation was €311k. This suggests that Marcello Perini is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	€355k	€343k	70%
Other	€156k	€128k	30%
Total Compensation	€511k	€471k	100%

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. According to our research, Gefran has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Gefran S.p.A.'s Growth

Over the last three years, Gefran S.p.A. has shrunk its earnings per share by 6.3% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Few shareholders would be pleased to read that EPS have declined. And the flat revenue hardly impresses. 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 Gefran S.p.A. Been A Good Investment?

Gefran S.p.A. has not done too badly by shareholders, with a total return of 7.3%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Gefran that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.