In 2015 Bertrand Dumazy was appointed CEO of Edenred SA (EPA:EDEN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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.
How Does Bertrand Dumazy's Compensation Compare With Similar Sized Companies?
According to our data, Edenred SA has a market capitalization of €11b, and paid its CEO total annual compensation worth €4.3m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €825k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a group of companies with market caps over €7.1b, we found that their median CEO total compensation was €3.2m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
As you can see, Bertrand Dumazy is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Edenred SA is paying too much. 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 Edenred has changed from year to year.
Is Edenred SA Growing?
Over the last three years Edenred SA has grown its earnings per share (EPS) by an average of 14% per year (using a line of best fit). Its revenue is up 12% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Edenred SA Been A Good Investment?
Most shareholders would probably be pleased with Edenred SA for providing a total return of 153% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared the total CEO remuneration paid by Edenred SA, and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of 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. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Edenred shares with their own money (free access).
Important note: Edenred 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.
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.
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