We think Sanofi's (EPA:SAN) CEO May Struggle To See Much Of A Pay Rise This Year

Key Insights

• Sanofi to hold its Annual General Meeting on 30th of April
• CEO Paul Hudson's total compensation includes salary of €1.40m
• The total compensation is similar to the average for the industry
• Sanofi's EPS declined by 3.3% over the past three years while total shareholder return over the past three years was 1.1%

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Share price growth at Sanofi (EPA:SAN) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 30th of April. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Sanofi

Comparing Sanofi's CEO Compensation With The Industry

At the time of writing, our data shows that Sanofi has a market capitalization of €112b, and reported total annual CEO compensation of €10.0m for the year to December 2024. We note that's a small decrease of 5.9% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.4m.

In comparison with other companies in the French Pharmaceuticals industry with market capitalizations over €7.0b, the reported median total CEO compensation was €8.8m. This suggests that Sanofi remunerates its CEO largely in line with the industry average. Moreover, Paul Hudson also holds €12m worth of Sanofi stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	€1.4m	€1.4m	14%
Other	€8.6m	€9.2m	86%
Total Compensation	€10.0m	€11m	100%

On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. Sanofi 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.

Sanofi's Growth

Over the last three years, Sanofi has shrunk its earnings per share by 3.3% per year. In the last year, its revenue is up 7.7%.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sanofi Been A Good Investment?

With a total shareholder return of 1.1% over three years, Sanofi has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.