There Could Be A Chance Teraplast S.A.'s (BVB:TRP) CEO Will Have Their Compensation Increased

Key Insights

• Teraplast to hold its Annual General Meeting on 14th of September
• Total pay for CEO Alexandru Stânean includes RON881.3k salary
• The total compensation is 63% less than the average for the industry
• Teraplast's total shareholder return over the past three years was 103% while its EPS grew by 0.8% over the past three years

Shareholders will probably not be disappointed by the robust results at Teraplast S.A. (BVB:TRP) recently and they will be keeping this in mind as they go into the AGM on 14th of September. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

See our latest analysis for Teraplast

How Does Total Compensation For Alexandru Stânean Compare With Other Companies In The Industry?

According to our data, Teraplast S.A. has a market capitalization of RON1.0b, and paid its CEO total annual compensation worth RON1.0m over the year to December 2022. Notably, that's a decrease of 20% over the year before. In particular, the salary of RON881.3k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Romania Chemicals industry with market caps ranging from RON464m to RON1.9b, we found that the median CEO total compensation was RON2.8m. This suggests that Alexandru Stânean is paid below the industry median. What's more, Alexandru Stânean holds RON629k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	RON881k	RON849k	86%
Other	RON149k	RON441k	14%
Total Compensation	RON1.0m	RON1.3m	100%

On an industry level, around 44% of total compensation represents salary and 56% is other remuneration. It's interesting to note that Teraplast pays out a greater portion of remuneration through salary, compared to the industry. 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.

A Look at Teraplast S.A.'s Growth Numbers

Over the last three years, Teraplast S.A. has not seen its earnings per share change much, though there is a slight positive movement. Its revenue is down 8.1% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Teraplast S.A. Been A Good Investment?

We think that the total shareholder return of 103%, over three years, would leave most Teraplast S.A. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

The company's overall performance, while not bad, could be better. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Teraplast we think you should know about.

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. 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.