In 1989 Bernard Arnault was appointed CEO of LVMH Moët Hennessy – Louis Vuitton, Société Européenne (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.
See our latest analysis for LVMH Moët Hennessy – Louis Vuitton Société Européenne
How Does Bernard Arnault’s Compensation Compare With Similar Sized Companies?
Our data indicates that LVMH Moët Hennessy – Louis Vuitton, Société Européenne is worth €173b, and total annual CEO compensation is €8.2m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at €1.1m. We took a group of companies with market capitalizations over €7.2b, and calculated the median CEO total compensation to be €3.3m. (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).
It would therefore appear that LVMH Moët Hennessy – Louis Vuitton, Société Européenne pays Bernard Arnault more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. 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 Société Européenne, below.
Is LVMH Moët Hennessy – Louis Vuitton, Société Européenne Growing?
LVMH Moët Hennessy – Louis Vuitton, Société Européenne has increased its earnings per share (EPS) by an average of 21% a year, over the last three years (using a line of best fit). It achieved revenue growth of 12% 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 LVMH Moët Hennessy – Louis Vuitton, Société Européenne Been A Good Investment?
I think that the total shareholder return of 139%, over three years, would leave most LVMH Moët Hennessy – Louis Vuitton, Société Européenne shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
We compared total CEO remuneration at LVMH Moët Hennessy – Louis Vuitton, Société Européenne with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling LVMH Moët Hennessy – Louis Vuitton Société Européenne (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.