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In 2008 Frédéric Rose was appointed CEO of Technicolor SA (EPA:TCH). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Frédéric Rose's Compensation Compare With Similar Sized Companies?
Our data indicates that Technicolor SA is worth €334m, and total annual CEO compensation is €1.4m. (This figure is for the year to December 2018). That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at €995k. When we examined a selection of companies with market caps ranging from €178m to €712m, we found the median CEO total compensation was €357k.
It would therefore appear that Technicolor SA pays Frédéric Rose 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 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 Technicolor has changed from year to year.
Is Technicolor SA Growing?
Technicolor SA has reduced its earnings per share by an average of 86% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -6.2% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Technicolor SA Been A Good Investment?
Given the total loss of 86% over three years, many shareholders in Technicolor SA are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Technicolor SA pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! Shareholders may want to check for free if Technicolor insiders are buying or selling shares.
Important note: Technicolor 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.