Why Lexibook – Linguistic Electronic System Société anonyme’s (EPA:ALLEX) CEO Pay Matters To You

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In 2006 Emmanuel Le Cottier was appointed CEO of Lexibook – Linguistic Electronic System Société anonyme (EPA:ALLEX). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Lexibook – Linguistic Electronic System Société anonyme

How Does Emmanuel Le Cottier’s Compensation Compare With Similar Sized Companies?

Our data indicates that Lexibook – Linguistic Electronic System Société anonyme is worth €5.4m, and total annual CEO compensation is €159k. (This figure is for the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at €140k. We looked at a group of companies with market capitalizations under €179m, and the median CEO total compensation was €148k.

So Emmanuel Le Cottier is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Lexibook – Linguistic Electronic System Société anonyme has changed from year to year.

ENXTPA:ALLEX CEO Compensation, June 20th 2019
ENXTPA:ALLEX CEO Compensation, June 20th 2019

Is Lexibook – Linguistic Electronic System Société anonyme Growing?

Over the last three years Lexibook – Linguistic Electronic System Société anonyme has grown its earnings per share (EPS) by an average of 8.6% per year (using a line of best fit). In the last year, its revenue is down -31%.

I would prefer it if there was revenue growth, but it is good to see EPS growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Lexibook – Linguistic Electronic System Société anonyme Been A Good Investment?

With a three year total loss of 48%, Lexibook – Linguistic Electronic System Société anonyme would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Remuneration for Emmanuel Le Cottier is close enough to the median pay for a CEO of a similar sized company .

The per share growth could be better, in our view. And we think the shareholder returns – over three years – have been underwhelming. So it would take a bold person to suggest the pay is too modest. Whatever your view on compensation, you might want to check if insiders are buying or selling Lexibook – Linguistic Electronic System Société anonyme shares (free trial).

Important note: Lexibook – Linguistic Electronic System Société anonyme may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.