Increases to CEO Compensation Might Be Put On Hold For Now at Rémy Cointreau SA (EPA:RCO)

Key Insights

• Rémy Cointreau will host its Annual General Meeting on 18th of July
• Salary of €823.0k is part of CEO Éric Vallat's total remuneration
• Total compensation is 83% above industry average
• Over the past three years, Rémy Cointreau's EPS grew by 7.9% and over the past three years, the total loss to shareholders 56%

Shareholders of Rémy Cointreau SA (EPA:RCO) will have been dismayed by the negative share price return over the last three years. 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 July. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Rémy Cointreau

Comparing Rémy Cointreau SA's CEO Compensation With The Industry

At the time of writing, our data shows that Rémy Cointreau SA has a market capitalization of €3.8b, and reported total annual CEO compensation of €1.9m for the year to March 2024. We note that's a decrease of 37% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €823k.

In comparison with other companies in the French Beverage industry with market capitalizations ranging from €1.8b to €5.9b, the reported median CEO total compensation was €1.0m. Accordingly, our analysis reveals that Rémy Cointreau SA pays Éric Vallat north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	€823k	€809k	44%
Other	€1.0m	€2.1m	56%
Total Compensation	€1.9m	€2.9m	100%

Talking in terms of the industry, salary represented approximately 72% of total compensation out of all the companies we analyzed, while other remuneration made up 28% of the pie. Rémy Cointreau pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Rémy Cointreau SA's Growth Numbers

Over the past three years, Rémy Cointreau SA has seen its earnings per share (EPS) grow by 7.9% per year. Its revenue is down 23% over the previous year.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Rémy Cointreau SA Been A Good Investment?

Few Rémy Cointreau SA shareholders would feel satisfied with the return of -56% over three years. 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. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Rémy Cointreau that investors should think about before committing capital to this stock.

Switching gears from Rémy Cointreau, 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.

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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.

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