Yahoo Finance Is Kering SA (EPA:KER) Overpaying Its CEO?
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In 2005 François-Henri Pinault was appointed CEO of Kering SA (EPA:KER). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Kering
How Does François-Henri Pinault's Compensation Compare With Similar Sized Companies?
According to our data, Kering SA has a market capitalization of €66b, and pays its CEO total annual compensation worth €12m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at €1.2m. We looked at a group of companies with market capitalizations over €7.1b and the median CEO total compensation was €3.3m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
As you can see, François-Henri Pinault is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Kering SA is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Kering has changed from year to year.
Is Kering SA Growing?
Kering SA has increased its earnings per share (EPS) by an average of 52% a year, over the last three years (using a line of best fit). It achieved revenue growth of 26% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Kering SA Been A Good Investment?
I think that the total shareholder return of 294%, over three years, would leave most Kering SA shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared the total CEO remuneration paid by Kering SA, and compared it to remuneration at a group of 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. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Kering.
If you want to buy a stock that is better than Kering, this free list of high return, low debt companies is a great place to look.
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.
