Does LU-VE S.p.A.'s (BIT:LUVE) CEO Pay Matter?
Matteo Liberali is the CEO of LU-VE S.p.A. (BIT:LUVE). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for LU-VE
How Does Matteo Liberali's Compensation Compare With Similar Sized Companies?
Our data indicates that LU-VE S.p.A. is worth €243m, and total annual CEO compensation was reported as €721k for the year to December 2019. That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at €297k. When we examined a selection of companies with market caps ranging from €92m to €367m, we found the median CEO total compensation was €546k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of LU-VE. On a sector level, around 49% of total compensation represents salary and 51% is other remuneration. Our data reveals that LU-VE allocates salary in line with the wider market.
It would therefore appear that LU-VE S.p.A. pays Matteo Liberali more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see a visual representation of the CEO compensation at LU-VE, below.
Is LU-VE S.p.A. Growing?
Over the last three years LU-VE S.p.A. has seen earnings per share (EPS) move in a positive direction by an average of 11% per year (using a line of best fit). In the last year, its revenue is up 28%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has LU-VE S.p.A. Been A Good Investment?
With a three year total loss of 15%, LU-VE S.p.A. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We examined the amount LU-VE S.p.A. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. On another note, we've spotted 3 warning signs for LU-VE that investors should look into moving forward.
Of course, you might find a fantastic investment by looking elsewhere. 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. 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. Thank you for reading.
