Why We Think Esso S.A.F.'s (EPA:ES) CEO Compensation Is Not Excessive At All

Key Insights

• EssoF will host its Annual General Meeting on 4th of June
• CEO Charles Amyot's total compensation includes salary of €223.1k
• The overall pay is 67% below the industry average
• EssoF's total shareholder return over the past three years was 184% while its EPS was down 43% over the past three years

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The performance at Esso S.A.F. (EPA:ES) has been rather lacklustre of late and shareholders may be wondering what CEO Charles Amyot is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 4th of June. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for EssoF

Comparing Esso S.A.F.'s CEO Compensation With The Industry

According to our data, Esso S.A.F. has a market capitalization of €1.7b, and paid its CEO total annual compensation worth €411k over the year to December 2024. That's just a smallish increase of 4.5% on last year. In particular, the salary of €223.1k, makes up a fairly large portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the French Oil and Gas industry with market capitalizations between €886m and €2.8b, we discovered that the median CEO total compensation of that group was €1.2m. That is to say, Charles Amyot is paid under the industry median.

On an industry level, roughly 62% of total compensation represents salary and 38% is other remuneration. In EssoF's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Esso S.A.F.'s Growth

Esso S.A.F. has reduced its earnings per share by 43% a year over the last three years. In the last year, its revenue is down 6.7%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Esso S.A.F. Been A Good Investment?

Boasting a total shareholder return of 184% over three years, Esso S.A.F. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 4 warning signs for EssoF that investors should look into moving forward.

Important note: EssoF 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.