Shareholders May Be More Conservative With Text S.A.'s (WSE:TXT) CEO Compensation For Now

Key Insights

• Text's Annual General Meeting to take place on 22nd of August
• CEO Mariusz Cieply Warm's total compensation includes salary of zł2.35m
• The overall pay is 54% above the industry average
• Text's EPS grew by 18% over the past three years while total shareholder loss over the past three years was 24%

In the past three years, the share price of Text S.A. (WSE:TXT) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 22nd of August. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Text

Comparing Text S.A.'s CEO Compensation With The Industry

At the time of writing, our data shows that Text S.A. has a market capitalization of zł2.1b, and reported total annual CEO compensation of zł4.6m for the year to March 2024. Notably, that's an increase of 32% over the year before. In particular, the salary of zł2.35m, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar companies from the Polish Software industry with market caps ranging from zł777m to zł3.1b, we found that the median CEO total compensation was zł3.0m. Hence, we can conclude that Mariusz Cieply Warm is remunerated higher than the industry median. What's more, Mariusz Cieply Warm holds zł277m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	zł2.3m	zł1.7m	51%
Other	zł2.3m	zł1.8m	49%
Total Compensation	zł4.6m	zł3.5m	100%

Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. Text pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Text S.A.'s Growth

Text S.A. has seen its earnings per share (EPS) increase by 18% a year over the past three years. It achieved revenue growth of 13% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Text S.A. Been A Good Investment?

With a three year total loss of 24% for the shareholders, Text S.A. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues 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 is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Text that you should be aware of before investing.

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.