We Think The Compensation For Legrand SA's (EPA:LR) CEO Looks About Right

Key Insights

• Legrand's Annual General Meeting to take place on 29th of May
• Salary of €900.0k is part of CEO Benoît Coquart's total remuneration
• Total compensation is similar to the industry average
• Legrand's EPS grew by 15% over the past three years while total shareholder return over the past three years was 24%

Under the guidance of CEO Benoît Coquart, Legrand SA (EPA:LR) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29th of May. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Legrand

Comparing Legrand SA's CEO Compensation With The Industry

According to our data, Legrand SA has a market capitalization of €27b, and paid its CEO total annual compensation worth €3.7m over the year to December 2023. That's just a smallish increase of 5.2% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €900k.

On comparing similar companies in the French Electrical industry with market capitalizations above €7.4b, we found that the median total CEO compensation was €4.1m. This suggests that Legrand remunerates its CEO largely in line with the industry average. Furthermore, Benoît Coquart directly owns €11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	€900k	€900k	24%
Other	€2.8m	€2.6m	76%
Total Compensation	€3.7m	€3.5m	100%

Speaking on an industry level, nearly 31% of total compensation represents salary, while the remainder of 69% is other remuneration. Legrand pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Legrand SA's Growth

Over the past three years, Legrand SA has seen its earnings per share (EPS) grow by 15% per year. In the last year, its revenue is down 2.6%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Legrand SA Been A Good Investment?

Legrand SA has served shareholders reasonably well, with a total return of 24% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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

Important note: Legrand 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.