In 2015 Olivier Brandicourt was appointed CEO of Sanofi (EPA:SAN). First, this article will compare CEO compensation with compensation at other large companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Olivier Brandicourt's Compensation Compare With Similar Sized Companies?
According to our data, Sanofi has a market capitalization of €94b, and pays its CEO total annual compensation worth €7.3m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at €1.2m. When we examined a group of companies with market caps over €7.1b, we found that their median CEO total compensation was €3.3m. (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).
Thus we can conclude that Olivier Brandicourt receives more in total compensation than the median of a group of large companies in the same market as Sanofi. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Sanofi has changed over time.
Is Sanofi Growing?
On average over the last three years, Sanofi has shrunk earnings per share by 3.0% each year (measured with a line of best fit). In the last year, its revenue is up 5.1%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Sanofi Been A Good Investment?
Sanofi has served shareholders reasonably well, with a total return of 20% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at Sanofi with the amount paid at other large companies. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the CEO pay is too low. Shareholders may want to check for free if Sanofi insiders are buying or selling shares.
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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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. Thank you for reading.