Here's Why Shareholders May Want To Be Cautious With Increasing La Française de l'Energie S.A.'s (EPA:FDE) CEO Pay Packet

Key Insights

• La Française de l'Energie's Annual General Meeting to take place on 18th of December
• Total pay for CEO Antoine Forcinal includes €327.2k salary
• Total compensation is similar to the industry average
• La Française de l'Energie's EPS grew by 233% over the past three years while total shareholder loss over the past three years was 28%

In the past three years, the share price of La Française de l'Energie S.A. (EPA:FDE) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 18th of December. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for La Française de l'Energie

Comparing La Française de l'Energie S.A.'s CEO Compensation With The Industry

Our data indicates that La Française de l'Energie S.A. has a market capitalization of €115m, and total annual CEO compensation was reported as €517k for the year to June 2024. That's a notable decrease of 30% on last year. In particular, the salary of €327.2k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the French Oil and Gas industry with market capitalizations under €190m, the reported median total CEO compensation was €416k. So it looks like La Française de l'Energie compensates Antoine Forcinal in line with the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	€327k	€330k	63%
Other	€190k	€404k	37%
Total Compensation	€517k	€733k	100%

On an industry level, around 75% of total compensation represents salary and 25% is other remuneration. La Française de l'Energie pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

La Française de l'Energie S.A.'s Growth

La Française de l'Energie S.A.'s earnings per share (EPS) grew 233% per year over the last three years. It saw its revenue drop 20% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has La Française de l'Energie S.A. Been A Good Investment?

Given the total shareholder loss of 28% over three years, many shareholders in La Française de l'Energie S.A. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 La Française de l'Energie that investors should be aware of in a dynamic business environment.

Important note: La Française de l'Energie 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.