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Jean-March Jestin has been the CEO of Klépierre SA (EPA:LI) since 2016. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Jean-March Jestin's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Klépierre SA has a market cap of €9.0b, and reported total annual CEO compensation of €2.3m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at €650k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over €7.4b and the median CEO total compensation was €3.1m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
So Jean-March Jestin receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Klépierre has changed over time.
Is Klépierre SA Growing?
Over the last three years Klépierre SA has shrunk its earnings per share by an average of 35% per year (measured with a line of best fit). It achieved revenue growth of 19% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Klépierre SA Been A Good Investment?
Klépierre SA has generated a total shareholder return of 4.8% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Jean-March Jestin is close enough to the median pay for a CEO of a large company .
We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We wouldn't say the CEO pay is too high, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Klépierre.
Important note: Klépierre may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.