Increases to Carmat SA's (EPA:ALCAR) CEO Compensation Might Cool off for now

CEO Stéphane Piat has done a decent job of delivering relatively good performance at Carmat SA (EPA:ALCAR) recently. As shareholders go into the upcoming AGM on 12 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Carmat

How Does Total Compensation For Stéphane Piat Compare With Other Companies In The Industry?

According to our data, Carmat SA has a market capitalization of €380m, and paid its CEO total annual compensation worth €2.9m over the year to December 2020. We note that's an increase of 71% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €418k.

In comparison with other companies in the industry with market capitalizations ranging from €166m to €663m, the reported median CEO total compensation was €462k. This suggests that Stéphane Piat is paid more than the median for the industry.

Component	2020	2019	Proportion (2020)
Salary	€418k	€412k	14%
Other	€2.5m	€1.3m	86%
Total Compensation	€2.9m	€1.7m	100%

Talking in terms of the industry, salary represented approximately 64% of total compensation out of all the companies we analyzed, while other remuneration made up 36% of the pie. In Carmat's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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 Carmat SA's Growth Numbers

Carmat SA's earnings per share (EPS) grew 9.1% per year over the last three years. Its revenue is down 33% over the previous year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Carmat SA Been A Good Investment?

Carmat SA has served shareholders reasonably well, with a total return of 16% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Carmat you should be aware of, and 2 of them are significant.

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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