François-Henri Pinault has been the CEO of Kering SA (EPA:KER) since 2005. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we’ll consider growth that the business demonstrates. 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.
How Does François-Henri Pinault’s Compensation Compare With Similar Sized Companies?
Our data indicates that Kering SA is worth €58b, and total annual CEO compensation was reported as €36m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at €1.2m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over €7.3b and the median CEO total compensation was €4.1m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
As you can see, François-Henri Pinault is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Kering SA is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Kering has changed over time.
Is Kering SA Growing?
Over the last three years Kering SA has grown its earnings per share (EPS) by an average of 41% per year (using a line of best fit). It achieved revenue growth of 22% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.
Has Kering SA Been A Good Investment?
I think that the total shareholder return of 197%, over three years, would leave most Kering SA shareholders smiling. 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.
We examined the amount Kering SA pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Kering insiders are buying or selling shares.
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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