Patrick Pouyanné became the CEO of TOTAL S.A. (EPA:FP) in 2014. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Patrick Pouyanné's Compensation Compare With Similar Sized Companies?
Our data indicates that TOTAL S.A. is worth €85b, and total annual CEO compensation was reported as €6.2m for the year to December 2019. That's a fairly small increase of 6.1% on year before. While we always look at total compensation first, we note that the salary component is less, at €1.4m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations over €7.3b and the median CEO total compensation was €3.8m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of TOTAL. On a sector level, around 61% of total compensation represents salary and 39% is other remuneration. It's interesting to note that TOTAL allocates a smaller portion of compensation to salary in comparison to the broader industry.
As you can see, Patrick Pouyanné is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean TOTAL S.A. 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. You can see a visual representation of the CEO compensation at TOTAL, below.
Is TOTAL S.A. Growing?
Over the last three years TOTAL S.A. has seen earnings per share (EPS) move in a positive direction by an average of 8.0% per year (using a line of best fit). It saw its revenue drop 8.7% over the last year.
I would prefer it if there was revenue growth, but the improvement in EPS is good. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has TOTAL S.A. Been A Good Investment?
Given the total loss of 19% over three years, many shareholders in TOTAL S.A. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at TOTAL 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 have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. On another note, we've spotted 4 warning signs for TOTAL that investors should look into moving forward.
Important note: TOTAL 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.
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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.