How Should Investors React To Union Financière de France Banque's (EPA:UFF) CEO Pay?

Julien Brami became the CEO of Union Financière de France Banque SA (EPA:UFF) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Union Financière de France Banque.

View our latest analysis for Union Financière de France Banque

How Does Total Compensation For Julien Brami Compare With Other Companies In The Industry?

Our data indicates that Union Financière de France Banque SA has a market capitalization of €313m, and total annual CEO compensation was reported as €485k for the year to December 2019. We note that's a decrease of 15% compared to last year. Notably, the salary which is €300.0k, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between €164m and €657m, we discovered that the median CEO total compensation of that group was €656k. This suggests that Union Financière de France Banque remunerates its CEO largely in line with the industry average. What's more, Julien Brami holds €67k worth of shares in the company in their own name.

On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. Although there is a difference in how total compensation is set, Union Financière de France Banque more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Union Financière de France Banque SA's Growth

Over the last three years, Union Financière de France Banque SA has shrunk its earnings per share by 35% per year. It saw its revenue drop 11% 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Union Financière de France Banque SA Been A Good Investment?

With a three year total loss of 28% for the shareholders, Union Financière de France Banque SA would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we touched on above, Union Financière de France Banque SA is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Union Financière de France Banque that investors should be aware of in a dynamic business environment.

Switching gears from Union Financière de France Banque, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

If you decide to trade Union Financière de France Banque, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.