Is Ubisoft Entertainment SA’s (EPA:UBI) CEO Pay Fair?

Yves Guillemot is the CEO of Ubisoft Entertainment SA (EPA:UBI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Ubisoft Entertainment

How Does Yves Guillemot’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Ubisoft Entertainment SA has a market cap of €7.8b, and reported total annual CEO compensation of €1.9m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at €568k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from €3.6b to €11b, we found the median CEO total compensation was €2.4m.

That means Yves Guillemot receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Ubisoft Entertainment has changed over time.

ENXTPA:UBI CEO Compensation, January 16th 2020
ENXTPA:UBI CEO Compensation, January 16th 2020

Is Ubisoft Entertainment SA Growing?

On average over the last three years, Ubisoft Entertainment SA has shrunk earnings per share by 11% each year (measured with a line of best fit). Its revenue is down 13% over last year.

Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Ubisoft Entertainment SA Been A Good Investment?

I think that the total shareholder return of 114%, over three years, would leave most Ubisoft Entertainment SA shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.

In Summary…

Remuneration for Yves Guillemot is close enough to the median pay for a CEO of a similar sized company .

We feel that earnings per share have been a bit disappointing, but it’s nice to see positive shareholder returns over the last three years. So we think most shareholders wouldn’t be too worried about CEO compensation, which is close to the median for similar sized companies. Whatever your view on compensation, you might want to check if insiders are buying or selling Ubisoft Entertainment shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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