Shareholders May Be More Conservative With Dassault Systèmes SE's (EPA:DSY) CEO Compensation For Now

CEO Bernard Charles has done a decent job of delivering relatively good performance at Dassault Systèmes SE (EPA:DSY) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 26 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Dassault Systèmes

Comparing Dassault Systèmes SE's CEO Compensation With the industry

At the time of writing, our data shows that Dassault Systèmes SE has a market capitalization of €48b, and reported total annual CEO compensation of €21m for the year to December 2020. Notably, that's a decrease of 17% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.4m.

On comparing similar companies in the industry with market capitalizations above €6.6b, we found that the median total CEO compensation was €6.1m. Accordingly, our analysis reveals that Dassault Systèmes SE pays Bernard Charles north of the industry median. Moreover, Bernard Charles also holds €783m worth of Dassault Systèmes stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	€1.4m	€1.4m	7%
Other	€19m	€23m	93%
Total Compensation	€21m	€25m	100%

On an industry level, around 31% of total compensation represents salary and 69% is other remuneration. In Dassault Systèmes' case, non-salary compensation represents a greater slice of total remuneration, 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.

Dassault Systèmes SE's Growth

Over the last three years, Dassault Systèmes SE has not seen its earnings per share change much, though there is a slight positive movement. Its revenue is up 7.1% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Dassault Systèmes SE Been A Good Investment?

We think that the total shareholder return of 65%, over three years, would leave most Dassault Systèmes SE shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Dassault Systèmes that investors should think about before committing capital to this stock.

Important note: Dassault Systèmes is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

If you’re looking to trade Dassault Systèmes, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.