Here's Why Italgas S.p.A.'s (BIT:IG) CEO Compensation Is The Least Of Shareholders' Concerns

Key Insights

• Italgas' Annual General Meeting to take place on 6th of May
• CEO Paolo Gallo's total compensation includes salary of €859.5k
• The overall pay is comparable to the industry average
• Over the past three years, Italgas' EPS grew by 4.1% and over the past three years, the total shareholder return was 11%

Under the guidance of CEO Paolo Gallo, Italgas S.p.A. (BIT:IG) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 6th of May. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for Italgas

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

According to our data, Italgas S.p.A. has a market capitalization of €4.3b, and paid its CEO total annual compensation worth €2.6m over the year to December 2023. That's a notable decrease of 9.6% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €860k.

On examining similar-sized companies in the Italy Gas Utilities industry with market capitalizations between €1.9b and €6.0b, we discovered that the median CEO total compensation of that group was €2.3m. So it looks like Italgas compensates Paolo Gallo in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€860k	€844k	33%
Other	€1.7m	€2.0m	67%
Total Compensation	€2.6m	€2.8m	100%

On an industry level, around 36% of total compensation represents salary and 64% is other remuneration. Italgas is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Italgas S.p.A.'s Growth Numbers

Over the past three years, Italgas S.p.A. has seen its earnings per share (EPS) grow by 4.1% per year. Its revenue is up 16% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Italgas S.p.A. Been A Good Investment?

Italgas S.p.A. has served shareholders reasonably well, with a total return of 11% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Italgas you should be aware of, and 1 of them shouldn't be ignored.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.