This article will reflect on the compensation paid to Santiago Seage Medela who has served as CEO of Atlantica Sustainable Infrastructure plc (NASDAQ:AY) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Atlantica Sustainable Infrastructure.
How Does Total Compensation For Santiago Seage Medela Compare With Other Companies In The Industry?
According to our data, Atlantica Sustainable Infrastructure plc has a market capitalization of US$3.0b, and paid its CEO total annual compensation worth US$1.7m over the year to December 2019. We note that's a decrease of 33% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$728k.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$1.4m. This suggests that Atlantica Sustainable Infrastructure remunerates its CEO largely in line with the industry average. Furthermore, Santiago Seage Medela directly owns US$590k worth of shares in the company.
Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. According to our research, Atlantica Sustainable Infrastructure has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Atlantica Sustainable Infrastructure plc's Growth
Over the last three years, Atlantica Sustainable Infrastructure plc has shrunk its earnings per share by 19% per year. Its revenue is down 4.6% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Atlantica Sustainable Infrastructure plc Been A Good Investment?
We think that the total shareholder return of 55%, over three years, would leave most Atlantica Sustainable Infrastructure plc 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.
As we noted earlier, Atlantica Sustainable Infrastructure pays its CEO in line with similar-sized companies belonging to the same industry. This isn't great when you look at it against the backdrop of EPS growth, which has been negative for the past three years. On the other hand, shareholder returns are showing positive trends over the same time frame. We wouldn't say CEO compensation is too high, but shrinking EPS is undoubtedly an issue that will have to be addressed.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Atlantica Sustainable Infrastructure (2 make us uncomfortable!) that you should be aware of before investing here.
Important note: Atlantica Sustainable Infrastructure 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.
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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