A Quick Analysis On Kering's (EPA:KER) CEO Compensation

François-Henri Pinault has been the CEO of Kering SA (EPA:KER) since 2005, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Kering

How Does Total Compensation For François-Henri Pinault Compare With Other Companies In The Industry?

At the time of writing, our data shows that Kering SA has a market capitalization of €75b, and reported total annual CEO compensation of €5.4m for the year to December 2019. That's a notable decrease of 56% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.2m.

On comparing similar companies in the industry with market capitalizations above €6.8b, we found that the median total CEO compensation was €5.7m. So it looks like Kering compensates François-Henri Pinault in line with the median for the industry.

Speaking on an industry level, nearly 40% of total compensation represents salary, while the remainder of 60% is other remuneration. Kering sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Kering SA's Growth Numbers

Kering SA's earnings per share (EPS) grew 18% per year over the last three years. Its revenue is down 8.4% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Kering SA Been A Good Investment?

Most shareholders would probably be pleased with Kering SA for providing a total return of 77% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we touched on above, Kering SA is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Kering that investors should look into moving forward.

Switching gears from Kering, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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