In 1989 Bernard Arnault was appointed CEO of LVMH Moët Hennessy Louis Vuitton SE (EPA:MC). This analysis aims first to contrast CEO compensation with other large 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Bernard Arnault’s Compensation Compare With Similar Sized Companies?
Our data indicates that LVMH Moët Hennessy Louis Vuitton SE is worth €131.8b, and total annual CEO compensation is €8m. That’s actually a decrease on the year before. When we examined a group of companies with market caps over €7.0b, we found that their median CEO compensation was €4m.
Thus we can conclude that Bernard Arnault receives more in total compensation than the median of a group of large companies in the same market as LVMH Moët Hennessy Louis Vuitton SE. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at LVMH Moët Hennessy Louis Vuitton has changed from year to year.
Is LVMH Moët Hennessy Louis Vuitton SE Growing?
On average over the last three years, LVMH Moët Hennessy Louis Vuitton SE has grown earnings per share (EPS) by 8.5% each year. In the last year, its revenue is up 11%.
I think the revenue growth is good. And, while modest, the earnings per share growth is noticeable. So while we’d stop just short of calling this a top performer, but we think it is well worth watching. So this free report on the analyst consensus forecasts could help you make a master move on this stock.
Has LVMH Moët Hennessy Louis Vuitton SE Been A Good Investment?
I think that the total shareholder return of 67%, over three years, would leave most LVMH Moët Hennessy Louis Vuitton SE shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
We compared total CEO remuneration at LVMH Moët Hennessy Louis Vuitton SE with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. High CEO remuneration is not great, but it certainly doesn’t mean a stock will perform poorly. Still, shareholders might want to check if insiders have been selling.
Of course LVMH Moët Hennessy Louis Vuitton may not be the best stock to buy. So you may wish to see this free collection of other companies that have high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.