Is Ferroglobe PLC's (NASDAQ:GSM) CEO Paid Enough Relative To Peers?
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In 2015 Pedro Paguaga was appointed CEO of Ferroglobe PLC (NASDAQ:GSM). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Ferroglobe
How Does Pedro Paguaga's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Ferroglobe PLC has a market cap of US$375m, and is paying total annual CEO compensation of US$3.1m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$612k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.6m.
Thus we can conclude that Pedro Paguaga receives more in total compensation than the median of a group of companies in the same market, and of similar size to Ferroglobe PLC. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Ferroglobe, below.
Is Ferroglobe PLC Growing?
Over the last three years Ferroglobe PLC has grown its earnings per share (EPS) by an average of 63% per year (using a line of best fit). Its revenue is up 31% over last year.
This demonstrates that the company has been improving recently. A good result. 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 Ferroglobe PLC Been A Good Investment?
Given the total loss of 75% over three years, many shareholders in Ferroglobe PLC are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared the total CEO remuneration paid by Ferroglobe PLC, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Shareholders may want to check for free if Ferroglobe insiders are buying or selling shares.
Important note: Ferroglobe may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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. Thank you for reading.
