Is Picanol nv (EBR:PIC) Overpaying Its CEO?
Luc Tack became the CEO of Picanol nv (EBR:PIC) in 2009. 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 method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Picanol
How Does Luc Tack's Compensation Compare With Similar Sized Companies?
Our data indicates that Picanol nv is worth €977m, and total annual CEO compensation was reported as €1.7m for the year to December 2019. We note that's an increase of 1244% above last year. While we always look at total compensation first, we note that the salary component is less, at €716k. We examined companies with market caps from €367m to €1.5b, and discovered that the median CEO total compensation of that group was €532k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 51% of total compensation represents salary and 49% is other remuneration. Picanol is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation
Thus we can conclude that Luc Tack receives more in total compensation than the median of a group of companies in the same market, and of similar size to Picanol nv. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You can see, below, how CEO compensation at Picanol has changed over time.
Is Picanol nv Growing?
On average over the last three years, Picanol nv has shrunk earnings per share by 24% each year (measured with a line of best fit). It achieved revenue growth of 233% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.
Has Picanol nv Been A Good Investment?
Given the total loss of 39% over three years, many shareholders in Picanol nv are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at Picanol nv with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. This doesn't look great when you consider CEO remuneration is up on last year. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Looking into other areas, we've picked out 2 warning signs for Picanol that investors should think about before committing capital to this stock.
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.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.
