Bernard Arnault has been the CEO of LVMH Moët Hennessy - Louis Vuitton, Société Européenne (EPA:MC) since 1989. This analysis aims first to contrast CEO compensation with other large companies. 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.
How Does Bernard Arnault's Compensation Compare With Similar Sized Companies?
According to our data, LVMH Moët Hennessy - Louis Vuitton, Société Européenne has a market capitalization of €176b, and pays its CEO total annual compensation worth €8.2m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at €1.1m. When we examined a group of companies with market caps over €7.1b, we found that their median CEO total compensation was €3.3m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
Thus we can conclude that Bernard Arnault receives more in total compensation than the median of a group of large companies in the same market as LVMH Moët Hennessy - Louis Vuitton, Société Européenne. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at LVMH Moët Hennessy - Louis Vuitton Société Européenne has changed over time.
Is LVMH Moët Hennessy - Louis Vuitton, Société Européenne Growing?
Over the last three years LVMH Moët Hennessy - Louis Vuitton, Société Européenne has grown its earnings per share (EPS) by an average of 21% 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. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has LVMH Moët Hennessy - Louis Vuitton, Société Européenne Been A Good Investment?
Most shareholders would probably be pleased with LVMH Moët Hennessy - Louis Vuitton, Société Européenne for providing a total return of 142% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared total CEO remuneration at LVMH Moët Hennessy - Louis Vuitton, Société Européenne with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying LVMH Moët Hennessy - Louis Vuitton Société Européenne shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at email@example.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.