We Take A Look At Whether Capgemini SE's (EPA:CAP) CEO May Be Underpaid

Key Insights

• Capgemini will host its Annual General Meeting on 16th of May
• Salary of €1.00m is part of CEO Aiman Ezzat's total remuneration
• The overall pay is 51% below the industry average
• Over the past three years, Capgemini's EPS grew by 19% and over the past three years, the total shareholder return was 42%

The solid performance at Capgemini SE (EPA:CAP) has been impressive and shareholders will probably be pleased to know that CEO Aiman Ezzat has delivered. This would be kept in mind at the upcoming AGM on 16th of May which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for Capgemini

Comparing Capgemini SE's CEO Compensation With The Industry

At the time of writing, our data shows that Capgemini SE has a market capitalization of €35b, and reported total annual CEO compensation of €4.8m for the year to December 2023. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.0m.

For comparison, other companies in the French IT industry with market capitalizations above €7.4b, reported a median total CEO compensation of €9.8m. This suggests that Aiman Ezzat is paid below the industry median. Furthermore, Aiman Ezzat directly owns €23m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	€1.0m	€1.0m	21%
Other	€3.8m	€3.9m	79%
Total Compensation	€4.8m	€4.9m	100%

Speaking on an industry level, nearly 46% of total compensation represents salary, while the remainder of 54% is other remuneration. Capgemini sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Capgemini SE's Growth

Over the past three years, Capgemini SE has seen its earnings per share (EPS) grow by 19% per year. Its revenue is up 2.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Capgemini SE Been A Good Investment?

We think that the total shareholder return of 42%, over three years, would leave most Capgemini SE shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Capgemini.

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.