José Sevilla Álvarez became the CEO of Bankia, S.A. (BME:BKIA) in 2014. 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. 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.
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How Does José Sevilla Álvarez's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Bankia, S.A. has a market cap of €7.0b, and is paying total annual CEO compensation of €800k. (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 €500k. When we examined a selection of companies with market caps ranging from €3.6b to €11b, we found the median CEO total compensation was €100k.
As you can see, José Sevilla Álvarez is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Bankia, S.A. is paying too much. 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 Bankia has changed over time.
Is Bankia, S.A. Growing?
Over the last three years Bankia, S.A. has shrunk its earnings per share by an average of 21% per year (measured with a line of best fit). Its revenue is up 3.6% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Bankia, S.A. Been A Good Investment?
Given the total loss of 18% over three years, many shareholders in Bankia, S.A. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Bankia, S.A. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Bankia (free visualization of insider trades).
Important note: Bankia 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 email@example.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.