Octavio M. Alvídrez has been the CEO of Fresnillo Plc (LON:FRES) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Fresnillo.
Comparing Fresnillo Plc's CEO Compensation With the industry
At the time of writing, our data shows that Fresnillo Plc has a market capitalization of UK£8.6b, and reported total annual CEO compensation of US$1.2m for the year to December 2019. Notably, that's an increase of 31% over the year before. In particular, the salary of US$871.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations over UK£6.2b , the reported median total CEO compensation was US$2.1m. In other words, Fresnillo pays its CEO lower than the industry median.
On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. Fresnillo pays out 75% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Fresnillo Plc's Growth Numbers
Fresnillo Plc has reduced its earnings per share by 30% a year over the last three years. Its revenue is up 9.1% over the last year.
Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Fresnillo Plc Been A Good Investment?
Since shareholders would have lost about 5.1% over three years, some Fresnillo Plc investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Octavio M. is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.
Shareholders may want to check for free if Fresnillo insiders are buying or selling shares.
Important note: Fresnillo is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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