Yahoo Finance Is Cofina, SGPS, S.A.'s (ELI:CFN) CEO Pay Fair?
Paulo dos Santos Fernandes is the CEO of Cofina, SGPS, S.A. (ELI:CFN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Cofina SGPS
How Does Paulo dos Santos Fernandes's Compensation Compare With Similar Sized Companies?
According to our data, Cofina, SGPS, S.A. has a market capitalization of €27m, and paid its CEO total annual compensation worth €80k over the year to December 2019. We note that's an increase of 100% above last year. Notably, the salary of €80k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below €184m. The median CEO total compensation in that group is €240k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Cofina SGPS. Speaking on an industry level, we can see that nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. On a company level, Cofina SGPS prefers to reward its CEO through a salary, opting not to pay Paulo dos Santos Fernandes through non-salary benefits.
At first glance this seems like a real positive for shareholders, since Paulo dos Santos Fernandes is paid less than the average total compensation paid by similar sized companies. 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 Cofina SGPS, below.
Is Cofina, SGPS, S.A. Growing?
On average over the last three years, Cofina, SGPS, S.A. has seen earnings per share (EPS) move in a favourable direction by 26% each year (using a line of best fit). In the last year, its revenue is down 1.4%.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.
Has Cofina, SGPS, S.A. Been A Good Investment?
Given the total loss of 35% over three years, many shareholders in Cofina, SGPS, S.A. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
It appears that Cofina, SGPS, S.A. remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Paulo dos Santos Fernandes is generously paid, it would be good to see an improvement in business performance before too an increase in pay. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. Shifting gears from CEO pay for a second, we've picked out 3 warning signs for Cofina SGPS that investors should be aware of in a dynamic business environment.
Important note: Cofina SGPS 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.
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