Is Recticel SA/NV’s (EBR:REC) CEO Salary Justified?

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The CEO of Recticel SA/NV (EBR:REC) is Olivier Chapelle. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Recticel

How Does Olivier Chapelle’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Recticel SA/NV has a market cap of €425m, and is paying total annual CEO compensation of €943k. (This is based on the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at €540k. We looked at a group of companies with market capitalizations from €177m to €709m, and the median CEO total compensation was €5.8k.

It would therefore appear that Recticel SA/NV pays Olivier Chapelle more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Recticel, below.

ENXTBR:REC CEO Compensation, July 5th 2019
ENXTBR:REC CEO Compensation, July 5th 2019

Is Recticel SA/NV Growing?

Over the last three years Recticel SA/NV has grown its earnings per share (EPS) by an average of 37% per year (using a line of best fit). It saw its revenue drop -1.6% over the last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end.

Has Recticel SA/NV Been A Good Investment?

I think that the total shareholder return of 71%, over three years, would leave most Recticel SA/NV shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

We compared total CEO remuneration at Recticel SA/NV with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Recticel (free visualization of insider trades).

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

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.