Why We Think The CEO Of Tecnoglass Inc. (NYSE:TGLS) May Soon See A Pay Rise

The solid performance at Tecnoglass Inc. (NYSE:TGLS) has been impressive and shareholders will probably be pleased to know that CEO José Manuel Daes has delivered. This would be kept in mind at the upcoming AGM on 15 December 2022 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Our analysis indicates that TGLS is potentially undervalued!

Comparing Tecnoglass Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Tecnoglass Inc. has a market capitalization of US$1.5b, and reported total annual CEO compensation of US$2.0m for the year to December 2021. Notably, that's an increase of 25% over the year before. We note that the salary portion, which stands at US$1.51m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$5.2m. In other words, Tecnoglass pays its CEO lower than the industry median. What's more, José Manuel Daes holds US$8.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	US$1.5m	US$1.3m	77%
Other	US$454k	US$315k	23%
Total Compensation	US$2.0m	US$1.6m	100%

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. It's interesting to note that Tecnoglass 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 Tecnoglass Inc.'s Growth Numbers

Tecnoglass Inc. has seen its earnings per share (EPS) increase by 130% a year over the past three years. It achieved revenue growth of 36% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Tecnoglass Inc. Been A Good Investment?

We think that the total shareholder return of 281%, over three years, would leave most Tecnoglass Inc. 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.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Tecnoglass that investors should think about before committing capital to this stock.

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.