Shareholders May Be Wary Of Increasing CGG's (EPA:CGG) CEO Compensation Package

CGG (EPA:CGG) has not performed well recently and CEO Sophie Zurquiyah-Rousset will probably need to up their game. At the upcoming AGM on 12 May 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for CGG

Comparing CGG's CEO Compensation With the industry

According to our data, CGG has a market capitalization of €700m, and paid its CEO total annual compensation worth US$1.5m over the year to December 2020. Notably, that's a decrease of 36% over the year before. Notably, the salary which is US$770.6k, represents a considerable chunk of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from €333m to €1.3b, we found that the median CEO total compensation was US$1.1m. This suggests that Sophie Zurquiyah-Rousset is paid more than the median for the industry. Furthermore, Sophie Zurquiyah-Rousset directly owns €167k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	US$771k	US$707k	51%
Other	US$743k	US$1.6m	49%
Total Compensation	US$1.5m	US$2.3m	100%

Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. It's interesting to note that CGG allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

CGG's Growth

Over the last three years, CGG has shrunk its earnings per share by 21% per year. In the last year, its revenue is down 35%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has CGG Been A Good Investment?

With a total shareholder return of -51% over three years, CGG shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for CGG that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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