What Can We Make Of Eurazeo's (EPA:RF) CEO Compensation?

Virginie Sarah Morgon has been the CEO of Eurazeo SE (EPA:RF) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Eurazeo pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Eurazeo

How Does Total Compensation For Virginie Sarah Morgon Compare With Other Companies In The Industry?

According to our data, Eurazeo SE has a market capitalization of €4.3b, and paid its CEO total annual compensation worth €4.7m over the year to December 2019. That's just a smallish increase of 6.2% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.1m.

On examining similar-sized companies in the industry with market capitalizations between €3.3b and €9.8b, we discovered that the median CEO total compensation of that group was €3.5m. Hence, we can conclude that Virginie Sarah Morgon is remunerated higher than the industry median.

On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. It's interesting to note that Eurazeo allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Eurazeo SE's Growth

Eurazeo SE has reduced its earnings per share by 76% a year over the last three years. It saw its revenue drop 16% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Eurazeo SE Been A Good Investment?

Given the total shareholder loss of 15% over three years, many shareholders in Eurazeo SE are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Eurazeo SE is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which shouldn't be ignored) in Eurazeo we think you should know about.

Important note: Eurazeo is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
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