Is PSB Industries’s (EPA:PSB) CEO Being Overpaid?

The CEO of PSB Industries (EPA:PSB) is François-Xavier Entremont. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. 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 PSB Industries

How Does François-Xavier Entremont’s Compensation Compare With Similar Sized Companies?

According to our data, PSB Industries has a market capitalization of €126m, and pays its CEO total annual compensation worth €250k. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at €96k. We looked at a group of companies with market capitalizations under €176m, and the median CEO total compensation was €149k.

It would therefore appear that PSB Industries pays François-Xavier Entremont more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at PSB Industries has changed over time.

ENXTPA:PSB CEO Compensation, March 19th 2019
ENXTPA:PSB CEO Compensation, March 19th 2019

Is PSB Industries Growing?

On average over the last three years, PSB Industries has shrunk earnings per share by 44% each year (measured with a line of best fit). Its revenue is down -3.6% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has PSB Industries Been A Good Investment?

With a total shareholder return of 23% over three years, PSB Industries shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

We compared total CEO remuneration at PSB Industries with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

While shareholder returns are acceptable, they don’t delight. So we think more research is needed, but we don’t think the CEO underpaid. Shareholders may want to check for free if PSB Industries insiders are buying or selling shares.

Important note: PSB Industries may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.