This Is Why Shareholders May Want To Hold Back On A Pay Rise For Alstom SA's (EPA:ALO) CEO

Key Insights

• Alstom's Annual General Meeting to take place on 20th of June
• Salary of €950.0k is part of CEO Henri Poupart-Lafarge's total remuneration
• The overall pay is 35% below the industry average
• Over the past three years, Alstom's EPS fell by 42% and over the past three years, the total loss to shareholders 60%

The underwhelming performance at Alstom SA (EPA:ALO) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 20th of June. The data we gathered below shows that CEO compensation looks acceptable for now.

See our latest analysis for Alstom

How Does Total Compensation For Henri Poupart-Lafarge Compare With Other Companies In The Industry?

At the time of writing, our data shows that Alstom SA has a market capitalization of €6.4b, and reported total annual CEO compensation of €1.4m for the year to March 2024. That's a notable decrease of 37% on last year. In particular, the salary of €950.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the French Machinery industry with market capitalizations ranging between €3.7b and €11b had a median total CEO compensation of €2.1m. Accordingly, Alstom pays its CEO under the industry median. Moreover, Henri Poupart-Lafarge also holds €2.4m worth of Alstom stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	€950k	€950k	69%
Other	€434k	€1.2m	31%
Total Compensation	€1.4m	€2.2m	100%

Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. There isn't a significant difference between Alstom and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Alstom SA's Growth Numbers

Alstom SA has reduced its earnings per share by 42% a year over the last three years. It achieved revenue growth of 6.7% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Alstom SA Been A Good Investment?

Few Alstom SA shareholders would feel satisfied with the return of -60% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Alstom.

Important note: Alstom 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.

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