Jose Ignacio Sanchez Galan has been the CEO of Iberdrola, S.A. (BME:IBE) since 2001. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Jose Ignacio Sanchez Galan's Compensation Compare With Similar Sized Companies?
Our data indicates that Iberdrola, S.A. is worth €64b, and total annual CEO compensation was reported as €6.2m for the year to December 2019. That's a fairly small increase of 2.8% on year before. We think total compensation is more important but we note that the CEO salary is lower, at €2.3m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations over €7.0b, and calculated the median CEO total compensation to be €3.3m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
It would therefore appear that Iberdrola, S.A. pays Jose Ignacio Sanchez Galan more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Iberdrola has changed over time.
Is Iberdrola, S.A. Growing?
On average over the last three years, Iberdrola, S.A. has grown earnings per share (EPS) by 7.6% each year (using a line of best fit). It achieved revenue growth of 3.9% over the last year.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has Iberdrola, S.A. Been A Good Investment?
I think that the total shareholder return of 75%, over three years, would leave most Iberdrola, S.A. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Iberdrola, S.A. with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. Shifting gears from CEO pay for a second, we've spotted 2 warning signs for Iberdrola you should be aware of, and 1 of them can't be ignored.
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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