Increases to Enel SpA's (BIT:ENEL) CEO Compensation Might Cool off for now

Key Insights

• Enel to hold its Annual General Meeting on 10th of May
• Salary of €1.52m is part of CEO Francesco Starace's total remuneration
• The overall pay is 42% above the industry average
• Over the past three years, Enel's EPS grew by 17% and over the past three years, the total shareholder return was 18%

CEO Francesco Starace has done a decent job of delivering relatively good performance at Enel SpA (BIT:ENEL) recently. As shareholders go into the upcoming AGM on 10th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Enel

How Does Total Compensation For Francesco Starace Compare With Other Companies In The Industry?

Our data indicates that Enel SpA has a market capitalization of €62b, and total annual CEO compensation was reported as €2.7m for the year to December 2022. Notably, that's a decrease of 17% over the year before. Notably, the salary which is €1.52m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Italy Electric Utilities industry with market capitalizations over €7.3b, the reported median total CEO compensation was €1.9m. Accordingly, our analysis reveals that Enel SpA pays Francesco Starace north of the industry median.

Component	2022	2021	Proportion (2022)
Salary	€1.5m	€1.5m	57%
Other	€1.2m	€1.7m	43%
Total Compensation	€2.7m	€3.2m	100%

Talking in terms of the industry, salary represented approximately 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. Enel is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Enel SpA's Growth Numbers

Enel SpA's earnings per share (EPS) grew 17% per year over the last three years. In the last year, its revenue is up 66%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Enel SpA Been A Good Investment?

Enel SpA has served shareholders reasonably well, with a total return of 18% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Enel that you should be aware of before investing.

Important note: Enel 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. 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.