Here's Why Shareholders Should Examine Klépierre SA's (EPA:LI) CEO Compensation Package More Closely

Shareholders will probably not be too impressed with the underwhelming results at Klépierre SA (EPA:LI) recently. At the upcoming AGM on 17 June 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Klépierre

How Does Total Compensation For Jean-March Jestin Compare With Other Companies In The Industry?

Our data indicates that Klépierre SA has a market capitalization of €7.1b, and total annual CEO compensation was reported as €1.2m for the year to December 2020. We note that's a decrease of 51% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €581k.

In comparison with other companies in the industry with market capitalizations ranging from €3.3b to €9.9b, the reported median CEO total compensation was €1.5m. From this we gather that Jean-March Jestin is paid around the median for CEOs in the industry. Furthermore, Jean-March Jestin directly owns €2.1m worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	€581k	€750k	49%
Other	€601k	€1.7m	51%
Total Compensation	€1.2m	€2.4m	100%

On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. There isn't a significant difference between Klépierre and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Klépierre SA's Growth

Klépierre SA has reduced its earnings per share by 97% a year over the last three years. It saw its revenue drop 18% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Klépierre SA Been A Good Investment?

Given the total shareholder loss of 12% over three years, many shareholders in Klépierre SA are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Klépierre you should be aware of, and 1 of them is a bit concerning.

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. 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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