Is Lucibel SA’s (EPA:ALUCI) CEO Being Overpaid?

Frédéric Granotier is the CEO of Lucibel SA (EPA:ALUCI). 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 process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Lucibel

How Does Frédéric Granotier’s Compensation Compare With Similar Sized Companies?

According to our data, Lucibel SA has a market capitalization of €14m, and pays its CEO total annual compensation worth €260k. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at €110k. We looked at a group of companies with market capitalizations under €178m, and the median CEO total compensation was €132k.

Thus we can conclude that Frédéric Granotier receives more in total compensation than the median of a group of companies in the same market, and of similar size to Lucibel SA. 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.

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

ENXTPA:ALUCI CEO Compensation, April 9th 2019
ENXTPA:ALUCI CEO Compensation, April 9th 2019

Is Lucibel SA Growing?

Lucibel SA has increased its earnings per share (EPS) by an average of 81% a year, over the last three years (using a line of best fit). It saw its revenue drop -18% over the last year.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Lucibel SA Been A Good Investment?

Since shareholders would have lost about 57% over three years, some Lucibel SA shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared total CEO remuneration at Lucibel SA with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Lucibel (free visualization of insider trades).

If you want to buy a stock that is better than Lucibel, 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.