Shareholders May Not Be So Generous With Ermenegildo Zegna N.V.'s (NYSE:ZGN) CEO Compensation And Here's Why

Key Insights

• Ermenegildo Zegna's Annual General Meeting to take place on 26th of June
• Total pay for CEO Gildo di Monte Rubello includes €2.00m salary
• The total compensation is 43% higher than the average for the industry
• Ermenegildo Zegna's EPS grew by 65% over the past three years while total shareholder return over the past three years was 21%

Performance at Ermenegildo Zegna N.V. (NYSE:ZGN) has been reasonably good and CEO Gildo di Monte Rubello has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 26th of June. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Ermenegildo Zegna

How Does Total Compensation For Gildo di Monte Rubello Compare With Other Companies In The Industry?

According to our data, Ermenegildo Zegna N.V. has a market capitalization of US$2.9b, and paid its CEO total annual compensation worth €13m over the year to December 2023. Notably, that's an increase of 11% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at €2.0m.

On examining similar-sized companies in the American Luxury industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was €9.4m. Accordingly, our analysis reveals that Ermenegildo Zegna N.V. pays Gildo di Monte Rubello north of the industry median. What's more, Gildo di Monte Rubello holds US$95m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	€2.0m	€1.4m	15%
Other	€11m	€11m	85%
Total Compensation	€13m	€12m	100%

Talking in terms of the industry, salary represented approximately 24% of total compensation out of all the companies we analyzed, while other remuneration made up 76% of the pie. Ermenegildo Zegna sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Ermenegildo Zegna N.V.'s Growth Numbers

Ermenegildo Zegna N.V.'s earnings per share (EPS) grew 65% per year over the last three years. Its revenue is up 28% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Ermenegildo Zegna N.V. Been A Good Investment?

Ermenegildo Zegna N.V. has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Ermenegildo Zegna.

Important note: Ermenegildo Zegna 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com