François-Henri Pinault became the CEO of Kering SA (EPA:KER) in 2005. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does François-Henri Pinault's Compensation Compare With Similar Sized Companies?
Our data indicates that Kering SA is worth €73b, and total annual CEO compensation was reported as €12m 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 further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over €7.2b, we found that their median CEO total compensation was €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.
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.
You can see a visual representation of the CEO compensation at Kering, below.
Is Kering SA Growing?
Over the last three years Kering SA has grown its earnings per share (EPS) by an average of 41% per year (using a line of best fit). Its revenue is up 22% 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 Kering SA Been A Good Investment?
Most shareholders would probably be pleased with Kering SA for providing a total return of 214% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Kering SA, and compared it to remuneration at a group of other large companies. Our data suggests that it pays above the median CEO pay within that 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Kering (free visualization of insider trades).
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.
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