In 2012 Paul Hermelin was appointed CEO of Capgemini SE (EPA:CAP). This analysis aims first to contrast CEO compensation with other large 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Paul Hermelin’s Compensation Compare With Similar Sized Companies?
Our data indicates that Capgemini SE is worth €17.1b, and total annual CEO compensation is €5m. That’s a modest increase of 0.6% on the prior year year. We took a group of companies with market capitalizations over €7.0b, and calculated the median CEO compensation to be €4m.
Thus we can conclude that Paul Hermelin receives more in total compensation than the median of a group of large companies in the same market as Capgemini SE. 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 a visual representation of the CEO compensation at Capgemini, below.
Is Capgemini SE Growing?
On average over the last three years, Capgemini SE has shrunk earnings per share by 6.0% each year. It achieved revenue growth of 3.3% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Capgemini SE Been A Good Investment?
I think that the total shareholder return of 34%, over three years, would leave most Capgemini SE shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
We compared total CEO remuneration at Capgemini SE with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
On the other hand, returns have been good, so the company is doing something right. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. So you may want to check if insiders are buying Capgemini SE shares with their own money (free access).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.