Michel Van Geyte became the CEO of Leasinvest Real Estate SCA (EBR:LEAS) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Leasinvest Real Estate pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Note: The company does not report funds from operations, and as a result, we have used earnings per share in our analysis.
Check out our latest analysis for Leasinvest Real Estate
Comparing Leasinvest Real Estate SCA's CEO Compensation With the industry
At the time of writing, our data shows that Leasinvest Real Estate SCA has a market capitalization of €461m, and reported total annual CEO compensation of €675k for the year to December 2019. That's a notable increase of 32% on last year. Notably, the salary which is €425.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations ranging from €165m to €659m, the reported median CEO total compensation was €618k. So it looks like Leasinvest Real Estate compensates Michel Van Geyte in line with the median for the industry.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | €425k | €362k | 63% |
| Other | €250k | €148k | 37% |
| Total Compensation | €675k | €510k | 100% |
On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. Although there is a difference in how total compensation is set, Leasinvest Real Estate more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Leasinvest Real Estate SCA's Growth Numbers
Over the last three years, Leasinvest Real Estate SCA has shrunk its earnings per share by 23% per year. Its revenue is up 3.4% over the last year.
Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Leasinvest Real Estate SCA Been A Good Investment?
Since shareholders would have lost about 6.1% over three years, some Leasinvest Real Estate SCA investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we noted earlier, Leasinvest Real Estate pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Leasinvest Real Estate that investors should look into moving forward.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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Access Free AnalysisThis 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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About ENXTBR:NEXTA
Reasonable growth potential slight.
