Claranova SE's (EPA:CLA) CEO Compensation Is Looking A Bit Stretched At The Moment

The underwhelming share price performance of Claranova SE (EPA:CLA) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 01 December 2021. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Claranova

How Does Total Compensation For Pierre Cesarini Compare With Other Companies In The Industry?

At the time of writing, our data shows that Claranova SE has a market capitalization of €228m, and reported total annual CEO compensation of €816k for the year to June 2021. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €280k.

On comparing similar companies from the same industry with market caps ranging from €89m to €357m, we found that the median CEO total compensation was €325k. This suggests that Pierre Cesarini is paid more than the median for the industry. Furthermore, Pierre Cesarini directly owns €9.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	€280k	€253k	34%
Other	€536k	€557k	66%
Total Compensation	€816k	€810k	100%

Talking in terms of the industry, salary represented approximately 41% of total compensation out of all the companies we analyzed, while other remuneration made up 59% of the pie. It's interesting to note that Claranova allocates a smaller portion of compensation to salary in comparison 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 Claranova SE's Growth Numbers

Over the past three years, Claranova SE has seen its earnings per share (EPS) grow by 56% per year. In the last year, its revenue is up 15%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Claranova SE Been A Good Investment?

The return of -39% over three years would not have pleased Claranova SE shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Claranova that you should be aware of before investing.

Switching gears from Claranova, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

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