Bernard Arnault became the CEO of LVMH Moët Hennessy Louis Vuitton S.E. (EPA:MC) in 1989. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. 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 S.E. is worth €158b, and total annual CEO compensation is €8.0m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at €1.1m. We looked at a group of companies with market capitalizations over €7.1b and the median CEO total compensation was €2.9m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
As you can see, Bernard Arnault is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean LVMH Moët Hennessy Louis Vuitton S.E. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at LVMH Moët Hennessy Louis Vuitton, below.
Is LVMH Moët Hennessy Louis Vuitton S.E. Growing?
Over the last three years LVMH Moët Hennessy Louis Vuitton S.E. has grown its earnings per share (EPS) by an average of 22% per year (using a line of best fit). In the last year, its revenue is up 9.8%.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.
Has LVMH Moët Hennessy Louis Vuitton S.E. Been A Good Investment?
I think that the total shareholder return of 126%, over three years, would leave most LVMH Moët Hennessy Louis Vuitton S.E. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We examined the amount LVMH Moët Hennessy Louis Vuitton S.E. 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.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling LVMH Moët Hennessy Louis Vuitton shares (free trial).
Important note: LVMH Moët Hennessy Louis Vuitton 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.
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