Bruno Dauman became the CEO of Groupe JAJ (EPA:GJAJ) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Groupe JAJ's CEO Compensation With the industry
According to our data, Groupe JAJ has a market capitalization of €4.9m, and paid its CEO total annual compensation worth €253k over the year to March 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is €248.7k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below €164m, we found that the median total CEO compensation was €180k. Hence, we can conclude that Bruno Dauman is remunerated higher than the industry median.
On an industry level, roughly 40% of total compensation represents salary and 60% is other remuneration. Groupe JAJ pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Groupe JAJ's Growth Numbers
Groupe JAJ has reduced its earnings per share by 96% a year over the last three years. Its revenue is down 12% over the previous year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Groupe JAJ Been A Good Investment?
Since shareholders would have lost about 27% over three years, some Groupe JAJ investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
Groupe JAJ pays its CEO a majority of compensation through a salary. As previously discussed, Bruno is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
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 4 warning signs (and 3 which don't sit too well with us) in Groupe JAJ we think you should know about.
Important note: Groupe JAJ 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. 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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