This article will reflect on the compensation paid to Martin Bouygues who has served as CEO of Bouygues SA (EPA:EN) since 1989. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Bouygues
How Does Total Compensation For Martin Bouygues Compare With Other Companies In The Industry?
At the time of writing, our data shows that Bouygues SA has a market capitalization of €12b, and reported total annual CEO compensation of €2.5m for the year to December 2019. We note that’s a small decrease of 5.1% on last year. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at €920k.
For comparison, other companies in the industry with market capitalizations above €6.9b, reported a median total CEO compensation of €3.2m. So it looks like Bouygues compensates Martin Bouygues in line with the median for the industry. What’s more, Martin Bouygues holds €12m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | €920k | €920k | 37% |
| Other | €1.6m | €1.7m | 63% |
| Total Compensation | €2.5m | €2.7m | 100% |
On an industry level, around 52% of total compensation represents salary and 48% is other remuneration. In Bouygues’ case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Bouygues SA’s Growth Numbers
Bouygues SA has seen its earnings per share (EPS) increase by 4.0% a year over the past three years. It achieved revenue growth of 1.1% over the last year.
We’re not particularly impressed by the revenue growth, but we’re happy with the modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Bouygues SA Been A Good Investment?
Since shareholders would have lost about 5.0% over three years, some Bouygues SA investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude…
As we touched on above, Bouygues SA is currently paying a compensation that’s close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn’t look good when you place it against the backdrop of negative shareholder returns and flat earnings growth. Although we wouldn’t say CEO compensation is exceptionally high, it isn’t very low either. Shareholders might want to see substantial improvements in returns before agreeing that Martin deserves a raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That’s why we did some digging and identified 2 warning signs for Bouygues that you should be aware of before investing.
Switching gears from Bouygues, if you’re hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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