What Does Cegedim's (EPA:CGM) CEO Pay Reveal?

Jean-Claude Labrune has been the CEO of Cegedim SA (EPA:CGM) since 1994, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Cegedim pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Cegedim

Comparing Cegedim SA's CEO Compensation With the industry

According to our data, Cegedim SA has a market capitalization of €359m, and paid its CEO total annual compensation worth €540k over the year to December 2019. This means that the compensation hasn't changed much from last year. Notably, the salary which is €513.5k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from €164m to €654m, we found that the median CEO total compensation was €572k. So it looks like Cegedim compensates Jean-Claude Labrune in line with the median for the industry.

On an industry level, roughly 75% of total compensation represents salary and 25% is other remuneration. Cegedim pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Cegedim SA's Growth Numbers

Cegedim SA has seen its earnings per share (EPS) increase by 45% a year over the past three years. It achieved revenue growth of 1.7% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Cegedim SA Been A Good Investment?

Given the total shareholder loss of 21% over three years, many shareholders in Cegedim SA are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Cegedim pays its CEO a majority of compensation through a salary. As previously discussed, Jean-Claude is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. However, EPS growth is positive over the same time frame. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

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 2 warning signs for Cegedim that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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