How Should Investors Feel About Eutelsat Communications S.A.'s (EPA:ETL) CEO Pay?
In 2016 Rodolphe Belmer was appointed CEO of Eutelsat Communications S.A. (EPA:ETL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Eutelsat Communications
How Does Rodolphe Belmer's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Eutelsat Communications S.A. has a market cap of €3.4b, and reported total annual CEO compensation of €2.0m for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at €650k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from €1.8b to €5.8b, and discovered that the median CEO total compensation of that group was €1.5m.
As you can see, Rodolphe Belmer is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Eutelsat Communications S.A. is paying too much. 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 Eutelsat Communications, below.
Is Eutelsat Communications S.A. Growing?
Eutelsat Communications S.A. has reduced its earnings per share by an average of 6.1% a year, over the last three years (measured with a line of best fit). It saw its revenue drop 5.0% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Eutelsat Communications S.A. Been A Good Investment?
With a total shareholder return of 1.3% over three years, Eutelsat Communications S.A. has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
We compared total CEO remuneration at Eutelsat Communications S.A. with the amount paid at companies with a similar market capitalization. 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 to impress us, over the last three years. While shareholder returns are acceptable, they don't delight. So we think more research is needed, but we don't think the CEO underpaid. So you may want to check if insiders are buying Eutelsat Communications shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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