We Think The Compensation For Compagnie Générale des Établissements Michelin Société en commandite par actions' (EPA:ML) CEO Looks About Right

Key Insights

• Compagnie Générale des Établissements Michelin Société en commandite par actions will host its Annual General Meeting on 17th of May
• Total pay for CEO Florent Menegaux includes €1.10m salary
• Total compensation is similar to the industry average
• Compagnie Générale des Établissements Michelin Société en commandite par actions' total shareholder return over the past three years was 32% while its EPS grew by 47% over the past three years

CEO Florent Menegaux has done a decent job of delivering relatively good performance at Compagnie Générale des Établissements Michelin Société en commandite par actions (EPA:ML) recently. As shareholders go into the upcoming AGM on 17th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Compagnie Générale des Établissements Michelin Société en commandite par actions

How Does Total Compensation For Florent Menegaux Compare With Other Companies In The Industry?

According to our data, Compagnie Générale des Établissements Michelin Société en commandite par actions has a market capitalization of €27b, and paid its CEO total annual compensation worth €3.8m over the year to December 2023. Notably, that's an increase of 36% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.1m.

For comparison, other companies in the French Auto Components industry with market capitalizations above €7.4b, reported a median total CEO compensation of €3.8m. So it looks like Compagnie Générale des Établissements Michelin Société en commandite par actions compensates Florent Menegaux in line with the median for the industry. Furthermore, Florent Menegaux directly owns €4.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	€1.1m	€1.0m	29%
Other	€2.7m	€1.8m	71%
Total Compensation	€3.8m	€2.8m	100%

On an industry level, around 31% of total compensation represents salary and 69% is other remuneration. Although there is a difference in how total compensation is set, Compagnie Générale des Établissements Michelin Société en commandite par actions more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Compagnie Générale des Établissements Michelin Société en commandite par actions' Growth Numbers

Over the past three years, Compagnie Générale des Établissements Michelin Société en commandite par actions has seen its earnings per share (EPS) grow by 47% per year. Revenue was pretty flat on last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Compagnie Générale des Établissements Michelin Société en commandite par actions Been A Good Investment?

Compagnie Générale des Établissements Michelin Société en commandite par actions has generated a total shareholder return of 32% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Compagnie Générale des Établissements Michelin Société en commandite par actions that investors should think about before committing capital to this stock.

Important note: Compagnie Générale des Établissements Michelin Société en commandite par actions 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.