Yahoo Finance Why Prada S.p.A.'s (HKG:1913) CEO Pay Matters To You
Patrizio Bertelli has been the CEO of Prada S.p.A. (HKG:1913) since 2012. This analysis aims first to contrast CEO compensation with 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 method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Prada
How Does Patrizio Bertelli's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Prada S.p.A. has a market cap of HK$80b, and reported total annual CEO compensation of €12m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at . Importantly, there may be performance hurdles relating to the non-salary component 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 €773k. 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 Prada S.p.A. pays Patrizio Bertelli 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 a visual representation of the CEO compensation at Prada, below.
Is Prada S.p.A. Growing?
Prada S.p.A. has reduced its earnings per share by an average of 8.5% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 3.6%.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Prada S.p.A. Been A Good Investment?
Prada S.p.A. has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
We compared total CEO remuneration at Prada S.p.A. with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years. And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the CEO pay is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Prada (free visualization of insider trades).
Important note: Prada 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.
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.
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. Thank you for reading.
