Frédéric Chesnais has been the CEO of Atari SA (EPA:ATA) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Frédéric Chesnais Compare With Other Companies In The Industry?
According to our data, Atari SA has a market capitalization of €99m, and paid its CEO total annual compensation worth €52k over the year to March 2020. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €12k.
On comparing similar-sized companies in the industry with market capitalizations below €171m, we found that the median total CEO compensation was €218k. This suggests that Frédéric Chesnais is paid below the industry median. Moreover, Frédéric Chesnais also holds €691k worth of Atari stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. In Atari's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Atari SA's Growth Numbers
Atari SA has reduced its earnings per share by 38% a year over the last three years. In the last year, its revenue is up 17%.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Atari SA Been A Good Investment?
Since shareholders would have lost about 5.5% over three years, some Atari SA investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Frédéric is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But Atari has recorded negative shareholder returns and EPS growth over the last three years. On the flip side, recent revenue growth has been positive. Although it's fair to say CEO compensation is modest, shareholders might want to see healthier investor returns before thinking Frédéric deserves a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which makes us a bit uncomfortable) in Atari we think you should know about.
Important note: Atari is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
If you’re looking to trade Atari, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.