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Should You Worry About Ferroglobe PLC's (NASDAQ:GSM) CEO Pay Cheque?

Simply Wall St

Pedro Larrea Paguaga has been the CEO of Ferroglobe PLC (NASDAQ:GSM) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Ferroglobe

How Does Pedro Larrea Paguaga's Compensation Compare With Similar Sized Companies?

According to our data, Ferroglobe PLC has a market capitalization of US$112m, and paid its CEO total annual compensation worth US$2.6m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$634k. 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 below US$200m, and calculated the median CEO total compensation to be US$509k.

As you can see, Pedro Larrea Paguaga is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ferroglobe PLC is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Ferroglobe, below.

NasdaqGS:GSM CEO Compensation, October 26th 2019

Is Ferroglobe PLC Growing?

Ferroglobe PLC has increased its earnings per share (EPS) by an average of 68% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 2.1%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.

Has Ferroglobe PLC Been A Good Investment?

Since shareholders would have lost about 93% over three years, some Ferroglobe PLC shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Ferroglobe PLC 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.

However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Ferroglobe shares (free trial).

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 editorial-team@simplywallst.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.