We Discuss Why Eutelsat Group's (EPA:ETL) CEO Compensation May Be Closely Reviewed

Key Insights

• Eutelsat Group to hold its Annual General Meeting on 21st of November
• CEO Eva Merete Berneke's total compensation includes salary of €848.0k
• The total compensation is 30% higher than the average for the industry
• Eutelsat Group's three-year loss to shareholders was 65% while its EPS was down 56% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Eutelsat Group (EPA:ETL) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 21st of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Eutelsat Group

How Does Total Compensation For Eva Merete Berneke Compare With Other Companies In The Industry?

At the time of writing, our data shows that Eutelsat Group has a market capitalization of €1.7b, and reported total annual CEO compensation of €3.6m for the year to June 2024. That's a notable increase of 60% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €848k.

On comparing similar companies from the French Media industry with market caps ranging from €947m to €3.0b, we found that the median CEO total compensation was €2.7m. This suggests that Eva Merete Berneke is paid more than the median for the industry. Moreover, Eva Merete Berneke also holds €176k worth of Eutelsat Group stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	€848k	€650k	24%
Other	€2.7m	€1.6m	76%
Total Compensation	€3.6m	€2.2m	100%

Speaking on an industry level, nearly 46% of total compensation represents salary, while the remainder of 54% is other remuneration. Eutelsat Group sets aside a smaller share of compensation for salary, in comparison to the overall 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 Eutelsat Group's Growth Numbers

Eutelsat Group has reduced its earnings per share by 56% a year over the last three years. Its revenue is up 7.2% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Eutelsat Group Been A Good Investment?

The return of -65% over three years would not have pleased Eutelsat Group shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Eutelsat Group that investors should be aware of in a dynamic business environment.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.