Here's Why We Think Cinkarna Celje, d. d.'s (LJSE:CICG) CEO Compensation Looks Fair for the time being

Key Insights

• Cinkarna Celje d. d will host its Annual General Meeting on 21st of May
• Salary of €306.9k is part of CEO Ales Skok's total remuneration
• The total compensation is similar to the average for the industry
• Cinkarna Celje d. d's EPS declined by 11% over the past three years while total shareholder return over the past three years was 48%

Our free stock report includes 2 warning signs investors should be aware of before investing in Cinkarna Celje d. d. Read for free now.

Despite strong share price growth of 48% for Cinkarna Celje, d. d. (LJSE:CICG) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 21st of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Cinkarna Celje d. d

How Does Total Compensation For Ales Skok Compare With Other Companies In The Industry?

At the time of writing, our data shows that Cinkarna Celje, d. d. has a market capitalization of €251m, and reported total annual CEO compensation of €388k for the year to December 2024. We note that's an increase of 26% above last year. In particular, the salary of €306.9k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Slovenia Chemicals industry with market capitalizations between €89m and €356m, we discovered that the median CEO total compensation of that group was €491k. So it looks like Cinkarna Celje d. d compensates Ales Skok in line with the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	€307k	€297k	79%
Other	€81k	€10k	21%
Total Compensation	€388k	€307k	100%

Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. It's interesting to note that Cinkarna Celje d. d 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 Cinkarna Celje, d. d.'s Growth Numbers

Cinkarna Celje, d. d. has reduced its earnings per share by 11% a year over the last three years. Its revenue is up 13% over the last year.

Few shareholders would be pleased to read that EPS have declined. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Cinkarna Celje, d. d. Been A Good Investment?

Boasting a total shareholder return of 48% over three years, Cinkarna Celje, d. d. has done well by shareholders. 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.

To Conclude...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Cinkarna Celje d. d (1 is a bit unpleasant!) that you should be aware of before investing here.

Important note: Cinkarna Celje d. d 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. 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.