Juan Lasala Bernad is the CEO of Red Eléctrica Corporación, S.A. (BME:REE). This analysis aims first to contrast CEO compensation with other large companies. Then we’ll look at a snap shot of the business growth. 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 Juan Lasala Bernad’s Compensation Compare With Similar Sized Companies?
According to our data, Red Eléctrica Corporación, S.A. has a market capitalization of €10b, and pays its CEO total annual compensation worth €986k. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at €530k. We looked at a group of companies with market capitalizations over €7.1b and the median CEO compensation was €2.8m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Most shareholders would consider it a positive that Juan Lasala Bernad takes less compensation than the CEOs of most other large 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.
The graphic below shows how CEO compensation at Red Eléctrica Corporación has changed from year to year.
Is Red Eléctrica Corporación, S.A. Growing?
On average over the last three years, Red Eléctrica Corporación, S.A. has grown earnings per share (EPS) by 5.0% each year (using a line of best fit). In the last year, its revenue changed by just 0.1%.
I’d prefer higher revenue growth, but I’m happy with the modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Red Eléctrica Corporación, S.A. Been A Good Investment?
With a total shareholder return of 14% over three years, Red Eléctrica Corporación, S.A. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It appears that Red Eléctrica Corporación, S.A. remunerates its CEO below most large companies.
Juan Lasala Bernad is paid less than what is normal at large companies, and but overall performance has left me uninspired. But on this analysis I see no issue with the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Red Eléctrica Corporación (free visualization of insider trades).
Important note: Red Eléctrica Corporación 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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