How Does Tronic's Microsystems' (EPA:ALTRO) CEO Pay Compare With Company Performance?

Julien Bon became the CEO of Tronic's Microsystems SA (EPA:ALTRO) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Tronic's Microsystems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Tronic's Microsystems

Comparing Tronic's Microsystems SA's CEO Compensation With the industry

At the time of writing, our data shows that Tronic's Microsystems SA has a market capitalization of €25m, and reported total annual CEO compensation of €109k for the year to March 2020. That's a notable decrease of 20% on last year. We note that the salary portion, which stands at €100.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under €164m, the reported median total CEO compensation was €246k. That is to say, Julien Bon is paid under the industry median.

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. Tronic's Microsystems pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Tronic's Microsystems SA's Growth Numbers

Tronic's Microsystems SA has reduced its earnings per share by 15% a year over the last three years. It saw its revenue drop 5.8% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Tronic's Microsystems SA Been A Good Investment?

Since shareholders would have lost about 47% over three years, some Tronic's Microsystems SA investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Julien is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. EPS growth has failed to impress us, and the same can be said about shareholder returns. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

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 4 warning signs for Tronic's Microsystems (3 shouldn't be ignored!) that you should be aware of before investing here.

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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