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Is ENCE Energía y Celulosa, S.A.'s (BME:ENC) CEO Paid Enough Relative To Peers?

Simply Wall St

In 2010 Ignacio de Colmenares y Brunet was appointed CEO of ENCE Energía y Celulosa, S.A. (BME:ENC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for ENCE Energía y Celulosa

How Does Ignacio de Colmenares y Brunet's Compensation Compare With Similar Sized Companies?

According to our data, ENCE Energía y Celulosa, S.A. has a market capitalization of €595m, and paid its CEO total annual compensation worth €105k over the year to December 2019. We note that's an increase of 139% above last year. It is worth noting that the CEO compensation consists almost entirely of the salary, worth €105k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of €363m to €1.5b. The median total CEO compensation was €783k.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where ENCE Energía y Celulosa stands. Talking in terms of the sector, salary represented approximately 65% of total compensation out of all the companies we analysed, while other remuneration made up 35% of the pie. ENCE Energía y Celulosa is paying a higher share of its remuneration through a salary in comparison to the overall industry.

Most shareholders would consider it a positive that Ignacio de Colmenares y Brunet takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see, below, how CEO compensation at ENCE Energía y Celulosa has changed over time.

BME:ENC CEO Compensation March 27th 2020

Is ENCE Energía y Celulosa, S.A. Growing?

ENCE Energía y Celulosa, S.A. has seen earnings per share (EPS) move positively by an average of 3.1% a year, over the last three years (using a line of best fit). Its revenue is down 10% over last year.

I would argue that the lack of revenue growth in the last year is less than ideal, but I'm happy with the EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has ENCE Energía y Celulosa, S.A. Been A Good Investment?

With a three year total loss of 6.7%, ENCE Energía y Celulosa, S.A. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

ENCE Energía y Celulosa, S.A. is currently paying its CEO below what is normal for companies of its size.

It's well worth noting that while Ignacio de Colmenares y Brunet is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. So while shareholders shouldn't be overly concerned about CEO compensation, they would probably like to see improved shareholder returns before seeing a pay increase. Shifting gears from CEO pay for a second, we've picked out 4 warning signs for ENCE Energía y Celulosa that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.