Is Somfy SA (EPA:SO) Overpaying Its CEO?

The CEO of Somfy SA (EPA:SO) is Jean Despature. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Somfy

How Does Jean Despature’s Compensation Compare With Similar Sized Companies?

Our data indicates that Somfy SA is worth €2.8b, and total annual CEO compensation is €1.6m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at €572k. When we examined a selection of companies with market caps ranging from €1.8b to €5.7b, we found the median CEO total compensation was €1.6m.

So Jean Despature receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

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

ENXTPA:SO CEO Compensation, April 23rd 2019
ENXTPA:SO CEO Compensation, April 23rd 2019

Is Somfy SA Growing?

Somfy SA saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. In the last year, its revenue is up 3.4%.

The lack of earnings per share growth in the last three years is unimpressive. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Somfy SA Been A Good Investment?

Somfy SA has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

Jean Despature is paid around what is normal the leaders of comparable size companies.

The company isn’t growing earnings per share, and nor have the total returns inspired us. We wouldn’t say the CEO pay is too high, but it’s probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. Shareholders may want to check for free if Somfy insiders are buying or selling shares.

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