Yahoo Finance Is Banco Santander, S.A.'s (BME:SAN) CEO Pay Justified?
José Antonio Álvarez Álvarez is the CEO of Banco Santander, S.A. (BME:SAN). First, this article will compare CEO compensation with compensation at other large 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 process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Banco Santander
How Does José Antonio Álvarez Álvarez's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Banco Santander, S.A. has a market cap of €65b, and reported total annual CEO compensation of €9.0m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at €2.5m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over €7.2b, we found that their median CEO total compensation was €2.7m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
It would therefore appear that Banco Santander, S.A. pays José Antonio Álvarez Álvarez more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Banco Santander has changed over time.
Is Banco Santander, S.A. Growing?
Banco Santander, S.A. has increased its earnings per share (EPS) by an average of 8.2% a year, over the last three years (using a line of best fit). In the last year, its revenue changed by just 0.6%.
I would argue that the lack of revenue growth in the last year is less than ideal, but I'm happy with the EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. It could be important to check this free visual depiction of what analysts expect for the future.
Has Banco Santander, S.A. Been A Good Investment?
With a total shareholder return of 5.8% over three years, Banco Santander, S.A. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We examined the amount Banco Santander, S.A. pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Whatever your view on compensation, you might want to check if insiders are buying or selling Banco Santander 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.
