Does Tesgas' (WSE:TSG) CEO Salary Compare Well With The Performance Of The Company?

Wlodzimierz Kocik is the CEO of Tesgas S.A. (WSE:TSG), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. 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 Tesgas

Comparing Tesgas S.A.'s CEO Compensation With the industry

Our data indicates that Tesgas S.A. has a market capitalization of zł49m, and total annual CEO compensation was reported as zł533k for the year to December 2019. That's a notable increase of 70% on last year. In particular, the salary of zł528.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under zł743m, the reported median total CEO compensation was zł862k. That is to say, Wlodzimierz Kocik is paid under the industry median. What's more, Wlodzimierz Kocik holds zł11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 44% of total compensation represents salary and 56% is other remuneration. Tesgas pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Tesgas S.A.'s Growth

Tesgas S.A. has seen its earnings per share (EPS) increase by 110% a year over the past three years. It saw its revenue drop 3.7% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Tesgas S.A. Been A Good Investment?

We think that the total shareholder return of 105%, over three years, would leave most Tesgas S.A. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Wlodzimierz receives almost all of their compensation through a salary. As we touched on above, Tesgas S.A. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Wlodzimierz deserves a raise!

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Tesgas that investors should look into moving forward.

Important note: Tesgas 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. 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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