In 2016 Vito Bianco was appointed CEO of Iren SpA (BIT:IRE). First, this article will compare CEO compensation with compensation at similar sized 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 Vito Bianco’s Compensation Compare With Similar Sized Companies?
According to our data, Iren SpA has a market capitalization of €2.5b, and pays its CEO total annual compensation worth €454k. (This figure is for the year to 2015). We think total compensation is more important but we note that the CEO salary is lower, at €290k. We looked at a group of companies with market capitalizations from €1.8b to €5.6b, and the median CEO compensation was €1.3m.
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.
The graphic below shows how CEO compensation at Iren has changed from year to year.
Is Iren SpA Growing?
Over the last three years Iren SpA has grown its earnings per share (EPS) by an average of 31% per year. In the last year, its revenue is up 7.2%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Iren SpA Been A Good Investment?
I think that the total shareholder return of 40%, over three years, would leave most Iren SpA shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
It looks like Iren SpA pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Vito Bianco deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. So you may want to check if insiders are buying Iren shares with their own money (free access).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.