Does L'Air Liquide S.A.'s (EPA:AI) CEO Pay Compare Well With Peers?
In 1997 Benoît Potier was appointed CEO of L'Air Liquide S.A. (EPA:AI). This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for L'Air Liquide S.A
How Does Benoît Potier's Compensation Compare With Similar Sized Companies?
According to our data, L'Air Liquide S.A. has a market capitalization of €58b, and paid its CEO total annual compensation worth €5.6m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €1.3m. 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 €7.3b 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.
It would therefore appear that L'Air Liquide S.A. pays Benoît Potier more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at L'Air Liquide S.A, below.
Is L'Air Liquide S.A. Growing?
On average over the last three years, L'Air Liquide S.A. has grown earnings per share (EPS) by 4.5% each year (using a line of best fit). It achieved revenue growth of 7.8% over the last year.
I would argue that the improvement in revenue isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.
Has L'Air Liquide S.A. Been A Good Investment?
Boasting a total shareholder return of 68% over three years, L'Air Liquide S.A. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We examined the amount L'Air Liquide S.A. pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that 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. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at L'Air Liquide S.A.
Important note: L'Air Liquide S.A 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 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.
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