The CEO of EssilorLuxottica Société anonyme (EPA:EL) is Hubert Sagnières. First, this article will compare CEO compensation with compensation at 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Hubert Sagnières's Compensation Compare With Similar Sized Companies?
Our data indicates that EssilorLuxottica Société anonyme is worth €55b, and total annual CEO compensation was reported as €4.4m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €888k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations over €7.3b, and calculated the median CEO total compensation to be €3.2m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
Thus we can conclude that Hubert Sagnières receives more in total compensation than the median of a group of large companies in the same market as EssilorLuxottica Société anonyme. 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 EssilorLuxottica Société anonyme, below.
Is EssilorLuxottica Société anonyme Growing?
On average over the last three years, EssilorLuxottica Société anonyme has grown earnings per share (EPS) by 4.0% each year (using a line of best fit). It achieved revenue growth of 52% over the last year.
I like the look of the strong year-on-year improvement in revenue. With that in mind, the modestly improving EPS seems positive. I wouldn't say this is necessarily top notch growth, but it is certainly promising. You might want to check this free visual report on analyst forecasts for future earnings.
Has EssilorLuxottica Société anonyme Been A Good Investment?
EssilorLuxottica Société anonyme has generated a total shareholder return of 18% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by EssilorLuxottica Société anonyme, and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.
One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Whatever your view on compensation, you might want to check if insiders are buying or selling EssilorLuxottica Société anonyme shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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