In 2015 Carlos Nuno da Silva was appointed CEO of Galp Energia, SGPS, S.A. (ELI:GALP). This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Carlos Nuno da Silva's Compensation Compare With Similar Sized Companies?
According to our data, Galp Energia, SGPS, S.A. has a market capitalization of €12b, and pays its CEO total annual compensation worth €1.8m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at €980k. We took a group of companies with market capitalizations over €7.2b, and calculated the median CEO total compensation to be €3.1m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
A first glance this seems like a real positive for shareholders, since Carlos Nuno da Silva is paid less than the average total compensation paid by other large companies. 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 Galp Energia SGPS has changed over time.
Is Galp Energia, SGPS, S.A. Growing?
Over the last three years Galp Energia, SGPS, S.A. has grown its earnings per share (EPS) by an average of 60% per year (using a line of best fit). It achieved revenue growth of 10% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Galp Energia, SGPS, S.A. Been A Good Investment?
Galp Energia, SGPS, S.A. has generated a total shareholder return of 30% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It appears that Galp Energia, SGPS, S.A. remunerates its CEO below most large companies. Since the business is growing, many would argue this suggests the pay is modest. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Carlos Nuno da Silva is overcompensated.
It's great to see a company that pays its CEO reasonably, even while growing. But it would be nice if insiders were also buying shares. So you may want to check if insiders are buying Galp Energia SGPS shares with their own money (free access).
Important note: Galp Energia SGPS 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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.