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How Should Investors React To Lectra SA's (EPA:LSS) CEO Pay?

Simply Wall St

In 2002 Daniel Harari was appointed CEO of Lectra SA (EPA:LSS). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Lectra

How Does Daniel Harari's Compensation Compare With Similar Sized Companies?

Our data indicates that Lectra SA is worth €719m, and total annual CEO compensation was reported as €724k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €390k. We examined companies with market caps from €361m to €1.4b, and discovered that the median CEO total compensation of that group was €623k.

So Daniel Harari is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Lectra has changed from year to year.

ENXTPA:LSS CEO Compensation, December 9th 2019

Is Lectra SA Growing?

Lectra SA has increased its earnings per share (EPS) by an average of 2.1% a year, over the last three years (using a line of best fit). Revenue was pretty flat on last year.

I'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.

Has Lectra SA Been A Good Investment?

I think that the total shareholder return of 46%, over three years, would leave most Lectra SA shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Daniel Harari is paid around what is normal the leaders of comparable size companies.

While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So all things considered I'd venture that the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Lectra (free visualization of insider trades).

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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