Why Valeo SA's (EPA:FR) CEO Pay Matters To You

January 29, 2020
  •  Updated
September 30, 2022
Source: Shutterstock

Jacques Aschenbroich became the CEO of Valeo SA (EPA:FR) in 2009. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

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How Does Jacques Aschenbroich's Compensation Compare With Similar Sized Companies?

According to our data, Valeo SA has a market capitalization of €6.6b, and paid its CEO total annual compensation worth €4.2m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at €1.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from €3.6b to €11b, we found the median CEO total compensation was €2.6m.

It would therefore appear that Valeo SA pays Jacques Aschenbroich 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Valeo has changed from year to year.

ENXTPA:FR CEO Compensation, January 30th 2020
ENXTPA:FR CEO Compensation, January 30th 2020

Is Valeo SA Growing?

Over the last three years Valeo SA has shrunk its earnings per share by an average of 25% per year (measured with a line of best fit). In the last year, its revenue changed by just 0.6%.

Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Valeo SA Been A Good Investment?

Given the total loss of 48% over three years, many shareholders in Valeo SA are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We examined the amount Valeo SA pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Valeo.

If you want to buy a stock that is better than Valeo, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.

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