How Much Did Ubisoft Entertainment's (EPA:UBI) CEO Pocket Last Year?

Yves Guillemot is the CEO of Ubisoft Entertainment SA (EPA:UBI), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Ubisoft Entertainment.

See our latest analysis for Ubisoft Entertainment

How Does Total Compensation For Yves Guillemot Compare With Other Companies In The Industry?

According to our data, Ubisoft Entertainment SA has a market capitalization of €9.7b, and paid its CEO total annual compensation worth €1.5m over the year to March 2020. We note that's a decrease of 25% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €585k.

On comparing similar companies in the industry with market capitalizations above €6.6b, we found that the median total CEO compensation was €1.5m. From this we gather that Yves Guillemot is paid around the median for CEOs in the industry. What's more, Yves Guillemot holds €74m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 40% of total compensation represents salary and 60% is other remuneration. There isn't a significant difference between Ubisoft Entertainment and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Ubisoft Entertainment SA's Growth Numbers

Over the last three years, Ubisoft Entertainment SA has shrunk its earnings per share by 91% per year. In the last year, its revenue is down 6.8%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Ubisoft Entertainment SA Been A Good Investment?

Ubisoft Entertainment SA has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, Ubisoft Entertainment SA is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Ubisoft Entertainment has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. This doesn't compare well with CEO compensation, which is close to the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Ubisoft Entertainment (1 is concerning!) that you should be aware of before investing here.

Switching gears from Ubisoft Entertainment, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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