Mersen SA's (EPA:MRN) CEO Might Not Expect Shareholders To Be So Generous This Year

Mersen SA (EPA:MRN) has not performed well recently and CEO Luc Themelin will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 20 May 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Mersen

Comparing Mersen SA's CEO Compensation With the industry

According to our data, Mersen SA has a market capitalization of €625m, and paid its CEO total annual compensation worth €673k over the year to December 2020. Notably, that's a decrease of 37% over the year before. Notably, the salary which is €385.0k, represents a considerable chunk of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between €331m and €1.3b, we discovered that the median CEO total compensation of that group was €673k. So it looks like Mersen compensates Luc Themelin in line with the median for the industry. Moreover, Luc Themelin also holds €1.2m worth of Mersen stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	€385k	€440k	57%
Other	€288k	€636k	43%
Total Compensation	€673k	€1.1m	100%

Speaking on an industry level, nearly 39% of total compensation represents salary, while the remainder of 61% is other remuneration. According to our research, Mersen has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Mersen SA's Growth Numbers

Over the last three years, Mersen SA has shrunk its earnings per share by 18% per year. Its revenue is down 11% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Mersen SA Been A Good Investment?

Given the total shareholder loss of 19% over three years, many shareholders in Mersen SA are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is concerning) in Mersen we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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. 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.
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