Is Derichebourg SA (EPA:DBG) Excessively Paying Its CEO?

In 2006, Daniel Derichebourg was appointed CEO of Derichebourg SA (EPA:DBG). First, this article will compare CEO compensation with compensation at similar sized 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Derichebourg

How Does Daniel Derichebourg’s Compensation Compare With Similar Sized Companies?

According to our data, Derichebourg SA has a market capitalization of €428m, and paid its CEO total annual compensation worth €248k over the year to September 2019. While we always look at total compensation first, we note that the salary component is less, at €228k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of €183m to €731m. The median total CEO compensation was €614k.

Now let’s take a look at the pay mix on an industry and company level to gain a better understanding of where Derichebourg stands. On an industry level, roughly 55% of total compensation represents salary and 45% is other remuneration. According to our research, Derichebourg has allocated a higher percentage of pay to salary in comparison to the broader sector.

At first glance this seems like a real positive for shareholders, since Daniel Derichebourg is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business. You can see a visual representation of the CEO compensation at Derichebourg, below.

ENXTPA:DBG CEO Compensation May 23rd 2020
ENXTPA:DBG CEO Compensation May 23rd 2020

Is Derichebourg SA Growing?

Over the last three years Derichebourg SA has seen earnings per share (EPS) move in a positive direction by an average of 14% per year (using a line of best fit). It saw its revenue drop 7.4% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.

Has Derichebourg SA Been A Good Investment?

Given the total loss of 54% over three years, many shareholders in Derichebourg SA are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Derichebourg SA is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we would not say that Daniel Derichebourg is generously paid, it would be good to see an improvement in business performance before too an increase in pay. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. Shifting gears from CEO pay for a second, we’ve picked out 3 warning signs for Derichebourg that investors should be aware of in a dynamic business environment.

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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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. Thank you for reading.