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How Should Investors React To UCB SA's (EBR:UCB) CEO Pay?

Simply Wall St

Jean-Christophe Tellier became the CEO of UCB SA (EBR:UCB) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for UCB

How Does Jean-Christophe Tellier's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that UCB SA has a market cap of €13b, and reported total annual CEO compensation of €76k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at . We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a group of companies with market caps over €7.2b, we found that their median CEO total compensation was €2.3m. (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).

A first glance this seems like a real positive for shareholders, since Jean-Christophe Tellier is paid less than the average total compensation paid by other large companies. Though positive, it's important we delve into the performance of the actual business.

You can see, below, how CEO compensation at UCB has changed over time.

ENXTBR:UCB CEO Compensation, October 17th 2019

Is UCB SA Growing?

UCB SA has increased its earnings per share (EPS) by an average of 18% a year, over the last three years (using a line of best fit). It achieved revenue growth of 2.6% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has UCB SA Been A Good Investment?

UCB SA has generated a total shareholder return of 8.9% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

It appears that UCB SA remunerates its CEO below most large companies.

Considering the underlying business is growing earnings, this would suggest the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Jean-Christophe Tellier is overcompensated. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. Whatever your view on compensation, you might want to check if insiders are buying or selling UCB shares (free trial).

If you want to buy a stock that is better than UCB, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.