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Is Compagnie de Saint-Gobain S.A.'s (EPA:SGO) CEO Paid Enough Relative To Peers?

Simply Wall St

Pierre-André de Chalendar has been the CEO of Compagnie de Saint-Gobain S.A. (EPA:SGO) since 2007. This analysis aims first to contrast CEO compensation with other large companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Compagnie de Saint-Gobain

How Does Pierre-André de Chalendar's Compensation Compare With Similar Sized Companies?

According to our data, Compagnie de Saint-Gobain S.A. has a market capitalization of €21b, and paid its CEO total annual compensation worth €3.5m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €1.2m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations over €7.2b and the median CEO total compensation was €3.4m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

So Pierre-André de Chalendar receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Compagnie de Saint-Gobain has changed over time.

ENXTPA:SGO CEO Compensation, December 14th 2019

Is Compagnie de Saint-Gobain S.A. Growing?

On average over the last three years, Compagnie de Saint-Gobain S.A. has shrunk earnings per share by 19% each year (measured with a line of best fit). It achieved revenue growth of 3.6% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Compagnie de Saint-Gobain S.A. Been A Good Investment?

Since shareholders would have lost about 3.4% over three years, some Compagnie de Saint-Gobain S.A. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Pierre-André de Chalendar is paid around the same as most CEOs of large companies.

After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Few would argue that it's wise for the company to pay any more, before returns improve. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Compagnie de Saint-Gobain (free visualization of insider trades).

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.

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.