Does L'Oréal S.A.'s (EPA:OR) CEO Salary Compare Well With Others?

Jean-Paul Agon has been the CEO of L'Oréal S.A. (EPA:OR) since 2006. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for L'Oréal

How Does Jean-Paul Agon's Compensation Compare With Similar Sized Companies?

According to our data, L'Oréal S.A. has a market capitalization of €139b, and pays its CEO total annual compensation worth €9.5m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €2.2m. We took a group of companies with market capitalizations over €7.3b, and calculated the median CEO total compensation to be €4.1m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

As you can see, Jean-Paul Agon is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean L'Oréal S.A. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at L'Oréal, below.

Is L'Oréal S.A. Growing?

L'Oréal S.A. has increased its earnings per share (EPS) by an average of 10% a year, over the last three years (using a line of best fit). Its revenue is up 9.1% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.

Has L'Oréal S.A. Been A Good Investment?

Boasting a total shareholder return of 50% over three years, L'Oréal S.A. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared the total CEO remuneration paid by L'Oréal S.A., and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if L'Oréal insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.