Juan López-Belmonte Encina became the CEO of Laboratorios Farmaceuticos Rovi, S.A. (BME:ROVI) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.
How Does Juan López-Belmonte Encina's Compensation Compare With Similar Sized Companies?
According to our data, Laboratorios Farmaceuticos Rovi, S.A. has a market capitalization of €1.4b, and paid its CEO total annual compensation worth €541k over the year to December 2019. That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €320k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of €923m to €3.0b. The median total CEO compensation was €970k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 52% of total compensation out of all the companies we analysed, while other remuneration made up 48% of the pie. Laboratorios Farmaceuticos Rovi is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation
Most shareholders would consider it a positive that Juan López-Belmonte Encina takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. 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 Laboratorios Farmaceuticos Rovi, below.
Is Laboratorios Farmaceuticos Rovi, S.A. Growing?
Over the last three years Laboratorios Farmaceuticos Rovi, S.A. has seen earnings per share (EPS) move in a positive direction by an average of 9.0% per year (using a line of best fit). It achieved revenue growth of 26% over the last year.
I like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. I wouldn't say this is necessarily top notch growth, but it is certainly promising. It could be important to check this free visual depiction of what analysts expect for the future.
Has Laboratorios Farmaceuticos Rovi, S.A. Been A Good Investment?
Most shareholders would probably be pleased with Laboratorios Farmaceuticos Rovi, S.A. for providing a total return of 73% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It appears that Laboratorios Farmaceuticos Rovi, S.A. remunerates its CEO below most similar sized companies.
Juan López-Belmonte Encina is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. CEO compensation is an important area to keep your eyes on, but we've also identified 2 warning signs for Laboratorios Farmaceuticos Rovi (1 is a bit concerning!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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