In 2014 Carlos Tavares was appointed CEO of Peugeot S.A. (EPA:UG). First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Peugeot
How Does Carlos Tavares's Compensation Compare With Similar Sized Companies?
Our data indicates that Peugeot S.A. is worth €17b, and total annual CEO compensation is €7.6m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €1.5m. When we examined a group of companies with market caps over €7.2b, we found that their median CEO total compensation was €3.3m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Thus we can conclude that Carlos Tavares receives more in total compensation than the median of a group of large companies in the same market as Peugeot S.A.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Peugeot has changed over time.
Is Peugeot S.A. Growing?
Over the last three years Peugeot S.A. has grown its earnings per share (EPS) by an average of 20% per year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions.
Has Peugeot S.A. Been A Good Investment?
I think that the total shareholder return of 58%, over three years, would leave most Peugeot S.A. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We examined the amount Peugeot S.A. pays its CEO, and compared it to the amount paid by other large companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Peugeot shares (free trial).
If you want to buy a stock that is better than Peugeot, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.
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