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In 2016 Jean-Marc Jestin was appointed CEO of Klépierre SA (EPA:LI). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Jean-Marc Jestin's Compensation Compare With Similar Sized Companies?
Our data indicates that Klépierre SA is worth €8.8b, and total annual CEO compensation is €2.3m. (This number is for the twelve months until December 2018). That's a notable increase of 25% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €650k. When we examined a group of companies with market caps over €7.1b, we found that their median CEO total compensation was €3.4m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Klépierre has changed from year to year.
Is Klépierre SA Growing?
Over the last three years Klépierre SA has grown its earnings per share (EPS) by an average of 21% per year (using a line of best fit). In the last year, its revenue is down -2.0%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has Klépierre SA Been A Good Investment?
With a three year total loss of 15%, Klépierre SA would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
Klépierre SA is currently paying its CEO below what is normal for large companies. Since the business is growing, many would argue this suggests the pay is modest. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. So while we would not say that Jean-Marc Jestin is generously paid, it would be good to see an improvement in business performance before too an increase in pay.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Klépierre (free visualization of insider trades).
Important note: Klépierre may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 firstname.lastname@example.org. 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.