Shareholders Will Probably Hold Off On Increasing 74Software's (EPA:74SW) CEO Compensation For The Time Being

Key Insights

• 74Software's Annual General Meeting to take place on 20th of May
• Salary of €577.4k is part of CEO Patrick Donovan's total remuneration
• The total compensation is 182% higher than the average for the industry
• Over the past three years, 74Software's EPS grew by 44% and over the past three years, the total shareholder return was 160%

We've discovered 2 warning signs about 74Software. View them for free.

Performance at 74Software (EPA:74SW) has been reasonably good and CEO Patrick Donovan has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 20th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for 74Software

How Does Total Compensation For Patrick Donovan Compare With Other Companies In The Industry?

Our data indicates that 74Software has a market capitalization of €1.1b, and total annual CEO compensation was reported as €2.2m for the year to December 2024. That's a modest increase of 7.4% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at €577k.

In comparison with other companies in the French Software industry with market capitalizations ranging from €357m to €1.4b, the reported median CEO total compensation was €779k. Hence, we can conclude that Patrick Donovan is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	€577k	€578k	26%
Other	€1.6m	€1.5m	74%
Total Compensation	€2.2m	€2.0m	100%

On an industry level, around 40% of total compensation represents salary and 60% is other remuneration. 74Software pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at 74Software's Growth Numbers

74Software's earnings per share (EPS) grew 44% per year over the last three years. It achieved revenue growth of 45% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has 74Software Been A Good Investment?

We think that the total shareholder return of 160%, over three years, would leave most 74Software shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for 74Software that investors should be aware of in a dynamic business environment.

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.