Does Accenture plc’s (NYSE:ACN) CEO Pay Reflect Performance?
In 2011 Pierre Nanterme was appointed CEO of Accenture plc (NYSE:ACN). First, this article will compare CEO compensation with compensation at other large companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Accenture
How Does Pierre Nanterme’s Compensation Compare With Similar Sized Companies?
According to our data, Accenture plc has a market capitalization of US$100b, and pays its CEO total annual compensation worth US$20m. That’s a modest increase of 7.0% on the prior year year. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m.
Thus we can conclude that Pierre Nanterme receives more in total compensation than the median of a group of large companies in the same market as Accenture plc. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Accenture has changed over time.
Is Accenture plc Growing?
Accenture plc has increased its earnings per share (EPS) by an average of 4.8% a year, over the last three years In the last year, its revenue is up 14%.
This revenue growth could really point to a brighter future. And the modest growth in earnings per share isn’t bad, either. So while we’d stop just short of calling this a top performer, but we think it is well worth watching.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Accenture plc Been A Good Investment?
Most shareholders would probably be pleased with Accenture plc for providing a total return of 55% over three years. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
In Summary…
We compared total CEO remuneration at Accenture plc with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate.
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
