Jean-Bernard Lévy became the CEO of Electricité de France S.A. (EPA:EDF) in 2014. This analysis aims first to contrast CEO compensation with other large companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Jean-Bernard Lévy's Compensation Compare With Similar Sized Companies?
Our data indicates that Electricité de France S.A. is worth €31b, and total annual CEO compensation was reported as €453k for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth €450k. We looked at a group of companies with market capitalizations over €7.2b and the 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.
Most shareholders would consider it a positive that Jean-Bernard Lévy takes less in total compensation than the CEOs of most other large companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Electricité de France has changed over time.
Is Electricité de France S.A. Growing?
On average over the last three years, Electricité de France S.A. has shrunk earnings per share by 11% each year (measured with a line of best fit). In the last year, its revenue is up 5.9%.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Electricité de France S.A. Been A Good Investment?
Electricité de France S.A. has served shareholders reasonably well, with a total return of 30% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
It appears that Electricité de France S.A. remunerates its CEO below most large companies.
Shareholders should note that compensation for Jean-Bernard Lévy is under the median of a group of large companies. But the company lacks earnings per share growth, and returns to shareholders are less than stellar. We would like to see EPS growth from the business, although we wouldn't say the CEO pay is high. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Electricité de France.
Important note: Electricité de France 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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