Is Vallourec S.A.'s (EPA:VK) CEO Pay Fair?
Philippe Crouzet has been the CEO of Vallourec S.A. (EPA:VK) since 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.
See our latest analysis for Vallourec
How Does Philippe Crouzet's Compensation Compare With Similar Sized Companies?
According to our data, Vallourec S.A. has a market capitalization of €1.0b, and paid its CEO total annual compensation worth €2.1m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €798k. 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 from €363m to €1.5b, and the median CEO total compensation was €574k.
Thus we can conclude that Philippe Crouzet receives more in total compensation than the median of a group of companies in the same market, and of similar size to Vallourec S.A.. 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.
The graphic below shows how CEO compensation at Vallourec has changed from year to year.
Is Vallourec S.A. Growing?
Vallourec S.A. has increased its earnings per share (EPS) by an average of 71% a year, over the last three years (using a line of best fit). Its revenue is up 7.9% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.
Has Vallourec S.A. Been A Good Investment?
Since shareholders would have lost about 52% over three years, some Vallourec S.A. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We compared total CEO remuneration at Vallourec S.A. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Vallourec (free visualization of insider trades).
Important note: Vallourec 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 editorial-team@simplywallst.com. 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.
