Key Insights

• Ermenegildo Zegna's Annual General Meeting to take place on 26th of June
• CEO Gildo di Monte Rubello's total compensation includes salary of €2.00m
• The overall pay is 43% above the industry average
• Ermenegildo Zegna's total shareholder return over the past three years was 21% while its EPS grew by 65% over the past three years

CEO Gildo di Monte Rubello has done a decent job of delivering relatively good performance at Ermenegildo Zegna N.V. (NYSE:ZGN) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 26th of June. However, some shareholders will still be cautious of paying the CEO excessively.

Comparing Ermenegildo Zegna N.V.'s CEO Compensation With The Industry

Our data indicates that Ermenegildo Zegna N.V. has a market capitalization of US$2.9b, and total annual CEO compensation was reported as €13m for the year to December 2023. Notably, that's an increase of 11% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at €2.0m.

On comparing similar companies from the American Luxury industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was €9.4m. Accordingly, our analysis reveals that Ermenegildo Zegna N.V. pays Gildo di Monte Rubello north of the industry median. Furthermore, Gildo di Monte Rubello directly owns US$95m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 24% of total compensation represents salary, while the remainder of 76% is other remuneration. Ermenegildo Zegna sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Ermenegildo Zegna N.V.'s Growth Numbers

Ermenegildo Zegna N.V. has seen its earnings per share (EPS) increase by 65% a year over the past three years. In the last year, its revenue is up 28%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Ermenegildo Zegna N.V. Been A Good Investment?

With a total shareholder return of 21% over three years, Ermenegildo Zegna N.V. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

Whatever your view on compensation, you might want to check if insiders are buying or selling Ermenegildo Zegna shares (free trial).

Important note: Ermenegildo Zegna 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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com