We Think Shareholders May Consider Being More Generous With Ipsen S.A.'s (EPA:IPN) CEO Compensation Package

Key Insights

• Ipsen will host its Annual General Meeting on 28th of May
• CEO David Loew's total compensation includes salary of €987.5k
• The total compensation is 59% less than the average for the industry
• Over the past three years, Ipsen's EPS grew by 4.2% and over the past three years, the total shareholder return was 48%

Shareholders will probably not be disappointed by the robust results at Ipsen S.A. (EPA:IPN) recently and they will be keeping this in mind as they go into the AGM on 28th of May. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for Ipsen

How Does Total Compensation For David Loew Compare With Other Companies In The Industry?

Our data indicates that Ipsen S.A. has a market capitalization of €10b, and total annual CEO compensation was reported as €4.4m for the year to December 2023. 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 €988k.

In comparison with other companies in the French Pharmaceuticals industry with market capitalizations over €7.4b, the reported median total CEO compensation was €11m. This suggests that David Loew is paid below the industry median. Furthermore, David Loew directly owns €6.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	€988k	€950k	23%
Other	€3.4m	€3.4m	77%
Total Compensation	€4.4m	€4.3m	100%

Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. Ipsen pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Ipsen S.A.'s Growth Numbers

Ipsen S.A. has seen its earnings per share (EPS) increase by 4.2% a year over the past three years. In the last year, its revenue is up 4.8%.

We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Ipsen S.A. Been A Good Investment?

We think that the total shareholder return of 48%, over three years, would leave most Ipsen S.A. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's overall performance, while not bad, could be better. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

Whatever your view on compensation, you might want to check if insiders are buying or selling Ipsen shares (free trial).

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.

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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.