Michal Kornacki became the CEO of IMS S.A. (WSE:IMS) in 2007, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for IMS
Comparing IMS S.A.'s CEO Compensation With the industry
According to our data, IMS S.A. has a market capitalization of zł75m, and paid its CEO total annual compensation worth zł1.2m over the year to December 2019. We note that's an increase of 26% above last year. Notably, the salary which is zł686.0k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below zł739m, reported a median total CEO compensation of zł1.3m. So it looks like IMS compensates Michal Kornacki in line with the median for the industry. Moreover, Michal Kornacki also holds zł15m worth of IMS stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | zł686k | zł497k | 59% |
| Other | zł470k | zł420k | 41% |
| Total Compensation | zł1.2m | zł917k | 100% |
Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. IMS is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at IMS S.A.'s Growth Numbers
Over the last three years, IMS S.A. has shrunk its earnings per share by 1.1% per year. It saw its revenue drop 26% over the last year.
Its a bit disappointing to see that the company has failed to grow its EPS. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has IMS S.A. Been A Good Investment?
Since shareholders would have lost about 19% over three years, some IMS S.A. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we touched on above, IMS S.A. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for IMS that investors should look into moving forward.
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.
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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 WSE:IMS
Solid track record with adequate balance sheet.
