Anil Srivastava became the CEO of Leclanché SA (VTX:LECN) in 2014, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Leclanché
Comparing Leclanché SA's CEO Compensation With the industry
Our data indicates that Leclanché SA has a market capitalization of CHF91m, and total annual CEO compensation was reported as CHF848k for the year to December 2019. Notably, that's a decrease of 41% over the year before. We note that the salary portion, which stands at CHF520.0k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below CHF182m, reported a median total CEO compensation of CHF268k. Hence, we can conclude that Anil Srivastava is remunerated higher than the industry median.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CHF520k | CHF519k | 61% |
| Other | CHF328k | CHF910k | 39% |
| Total Compensation | CHF848k | CHF1.4m | 100% |
On an industry level, around 58% of total compensation represents salary and 42% is other remuneration. Leclanché is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Leclanché SA's Growth Numbers
Leclanché SA's earnings per share (EPS) grew 7.8% per year over the last three years. In the last year, its revenue is down 39%.
We generally like to see a little revenue growth, but the modest EPSgrowth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Leclanché SA Been A Good Investment?
Since shareholders would have lost about 78% over three years, some Leclanché SA investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, Leclanché pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for Leclanché, and although EPS growth is steady, it hasn't set the world on fire. And the situation doesn't look all that good when you see Anil is remunerated higher than the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which are concerning) in Leclanché we think you should know about.
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.
If you’re looking to trade Leclanché, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
New: AI Stock Screener & Alerts
Our new AI Stock Screener scans the market every day to uncover opportunities.
• Dividend Powerhouses (3%+ Yield)
• Undervalued Small Caps with Insider Buying
• High growth Tech and AI Companies
Or build your own from over 50 metrics.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
About SWX:LECN
Leclanché
Designs, develops, and manufactures customized turnkey energy storage solutions for electricity generation and transmission, mass transportation, heavy industrial machines, and specialty low voltage battery systems.
Low with imperfect balance sheet.
