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In 2013 José Daes was appointed CEO of Tecnoglass Inc. (NASDAQ:TGLS). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does José Daes's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Tecnoglass Inc. has a market cap of US$335m, and is paying total annual CEO compensation of US$1.1m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.8m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Tecnoglass, below.
Is Tecnoglass Inc. Growing?
Over the last three years Tecnoglass Inc. has shrunk its earnings per share by an average of 12% per year (measured with a line of best fit). In the last year, its revenue is up 16%.
Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Tecnoglass Inc. Been A Good Investment?
With a three year total loss of 19%, Tecnoglass Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
It appears that Tecnoglass Inc. remunerates its CEO below most similar sized companies.
The compensation paid to José Daes is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. Shareholders may want to check for free if Tecnoglass insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 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.