Key Insights

• Tecnoglass' Annual General Meeting to take place on 3rd of December
• Salary of US$2.94m is part of CEO José Daes's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Tecnoglass' EPS grew by 32% and over the past three years, the total shareholder return was 164%

It would be hard to discount the role that CEO José Daes has played in delivering the impressive results at Tecnoglass Inc. (NYSE:TGLS) recently. Coming up to the next AGM on 3rd of December, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Comparing Tecnoglass Inc.'s CEO Compensation With The Industry

According to our data, Tecnoglass Inc. has a market capitalization of US$3.8b, and paid its CEO total annual compensation worth US$4.0m over the year to December 2023. Notably, that's an increase of 40% over the year before. In particular, the salary of US$2.94m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the American Building industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$5.6m. This suggests that Tecnoglass remunerates its CEO largely in line with the industry average.

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. It's interesting to note that Tecnoglass pays out a greater portion of remuneration through salary, compared to the industry. 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 Tecnoglass Inc.'s Growth Numbers

Tecnoglass Inc. has seen its earnings per share (EPS) increase by 32% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Tecnoglass Inc. Been A Good Investment?

We think that the total shareholder return of 164%, over three years, would leave most Tecnoglass Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Tecnoglass that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.