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Is Lagardère SCA's (EPA:MMB) CEO Overpaid Relative To Its Peers?

Simply Wall St

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Arnaud Lagardère has been the CEO of Lagardère SCA (EPA:MMB) since 2003. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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 Lagardère

How Does Arnaud Lagardère's Compensation Compare With Similar Sized Companies?

According to our data, Lagardère SCA has a market capitalization of €3.0b, and pays its CEO total annual compensation worth €2.8m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €1.1m. We examined companies with market caps from €1.8b to €5.7b, and discovered that the median CEO total compensation of that group was €1.2m.

It would therefore appear that Lagardère SCA pays Arnaud Lagardère more than the median CEO remuneration at companies of a similar size, 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.

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

ENXTPA:MMB CEO Compensation, July 5th 2019

Is Lagardère SCA Growing?

On average over the last three years, Lagardère SCA has grown earnings per share (EPS) by 30% each year (using a line of best fit). Its revenue is up 2.3% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.

Has Lagardère SCA Been A Good Investment?

Boasting a total shareholder return of 38% over three years, Lagardère SCA 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 compared total CEO remuneration at Lagardère SCA with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Lagardère shares (free trial).

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.

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.