Should Shareholders Reconsider Proximus PLC's (EBR:PROX) CEO Compensation Package?

Key Insights

• Proximus to hold its Annual General Meeting on 17th of April
• Salary of €587.2k is part of CEO Guillaume Boutin's total remuneration
• Total compensation is similar to the industry average
• Proximus' three-year loss to shareholders was 50% while its EPS was down 14% over the past three years

Proximus PLC (EBR:PROX) has not performed well recently and CEO Guillaume Boutin will probably need to up their game. At the upcoming AGM on 17th of April, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Proximus

How Does Total Compensation For Guillaume Boutin Compare With Other Companies In The Industry?

Our data indicates that Proximus PLC has a market capitalization of €2.4b, and total annual CEO compensation was reported as €1.3m for the year to December 2023. That's a modest increase of 7.8% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €587k.

In comparison with other companies in the Belgium Telecom industry with market capitalizations ranging from €1.9b to €6.0b, the reported median CEO total compensation was €1.1m. This suggests that Proximus remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	€587k	€549k	45%
Other	€705k	€650k	55%
Total Compensation	€1.3m	€1.2m	100%

On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. Proximus sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Proximus PLC's Growth Numbers

Over the last three years, Proximus PLC has shrunk its earnings per share by 14% per year. Its revenue is up 2.4% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Proximus PLC Been A Good Investment?

The return of -50% over three years would not have pleased Proximus PLC shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which are a bit unpleasant) in Proximus we think you should know about.

Important note: Proximus is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.