We Think Thales S.A.'s (EPA:HO) CEO Compensation Looks Fair

Key Insights

• Thales to hold its Annual General Meeting on 15th of May
• CEO Patrice Caine's total compensation includes salary of €850.0k
• The total compensation is similar to the average for the industry
• Thales' EPS grew by 30% over the past three years while total shareholder return over the past three years was 110%

We have been pretty impressed with the performance at Thales S.A. (EPA:HO) recently and CEO Patrice Caine deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 15th of May. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for Thales

Comparing Thales S.A.'s CEO Compensation With The Industry

At the time of writing, our data shows that Thales S.A. has a market capitalization of €34b, and reported total annual CEO compensation of €2.9m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €850k.

For comparison, other companies in the French Aerospace & Defense industry with market capitalizations above €7.4b, reported a median total CEO compensation of €2.9m. From this we gather that Patrice Caine is paid around the median for CEOs in the industry. Furthermore, Patrice Caine directly owns €3.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	€850k	€850k	30%
Other	€2.0m	€2.0m	70%
Total Compensation	€2.9m	€2.9m	100%

On an industry level, around 32% of total compensation represents salary and 68% is other remuneration. Thales is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Thales S.A.'s Growth Numbers

Thales S.A. has seen its earnings per share (EPS) increase by 30% a year over the past three years. It achieved revenue growth of 4.9% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Thales S.A. Been A Good Investment?

Most shareholders would probably be pleased with Thales S.A. for providing a total return of 110% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Thales that investors should be aware of in a dynamic business environment.

Important note: Thales 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.