Is L'Air Liquide S.A.'s (EPA:AI) CEO Pay Fair?
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Benoît Potier became the CEO of L'Air Liquide S.A. (EPA:AI) in 1997. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. 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.
View our latest analysis for L'Air Liquide S.A
How Does Benoît Potier's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that L'Air Liquide S.A. has a market cap of €49b, and is paying total annual CEO compensation of €5.6m. (This figure is for the year to December 2018). That's a fairly small increase of 4.8% on year before. We think total compensation is more important but we note that the CEO salary is lower, at €1.3m. We looked at a group of companies with market capitalizations over €7.2b and the median CEO total compensation was €2.9m. (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 Benoît Potier receives more in total compensation than the median of a group of large companies in the same market as L'Air Liquide S.A.. 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.
The graphic below shows how CEO compensation at L'Air Liquide S.A has changed from year to year.
Is L'Air Liquide S.A. Growing?
On average over the last three years, L'Air Liquide S.A. has grown earnings per share (EPS) by 6.5% each year (using a line of best fit). It achieved revenue growth of 3.3% over the last year.
I'd prefer higher revenue growth, but I'm happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. It could be important to check this free visual depiction of what analysts expect for the future.
Has L'Air Liquide S.A. Been A Good Investment?
I think that the total shareholder return of 47%, over three years, would leave most L'Air Liquide S.A. shareholders smiling. 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 L'Air Liquide S.A. with the amount paid at other large companies. As discussed above, we discovered that the company pays more than the median of that group.
While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at L'Air Liquide S.A.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
