Alexandre Bompard became the CEO of Carrefour SA (EPA:CA) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Alexandre Bompard’s Compensation Compare With Similar Sized Companies?
Our data indicates that Carrefour SA is worth €11b, and total annual CEO compensation was reported as €7.3m for the year to December 2019. We think total compensation is more important but we note that the CEO salary is lower, at €1.5m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a group of companies with market caps over €7.3b, we found that their median CEO total compensation was €3.6m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
Next, let’s break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 37% of total compensation out of all the companies we analysed, while other remuneration made up 63% of the pie. Readers will want to know that Carrefour pays a modest slice of remuneration through salary, as compared to the wider sector.
As you can see, Alexandre Bompard is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Carrefour SA is paying too much. 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 Carrefour has changed from year to year.
Is Carrefour SA Growing?
Carrefour SA has reduced its earnings per share by an average of 67% a year, over the last three years (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Carrefour SA Been A Good Investment?
Since shareholders would have lost about 38% over three years, some Carrefour SA shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Carrefour 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.
We think many shareholders would be underwhelmed with the business growth over the last three years. Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Shifting gears from CEO pay for a second, we’ve picked out 4 warning signs for Carrefour that investors should be aware of in a dynamic business environment.
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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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. Thank you for reading.