Shareholders May Find It Hard To Justify Increasing Lectra SA's (EPA:LSS) CEO Compensation For Now

Key Insights

• Lectra to hold its Annual General Meeting on 25th of April
• CEO Daniel Harari's total compensation includes salary of €420.0k
• The total compensation is similar to the average for the industry
• Lectra's three-year loss to shareholders was 33% while its EPS grew by 1.1% over the past three years

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Shareholders of Lectra SA (EPA:LSS) will have been dismayed by the negative share price return over the last three years. 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 25th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Lectra

Comparing Lectra SA's CEO Compensation With The Industry

According to our data, Lectra SA has a market capitalization of €971m, and paid its CEO total annual compensation worth €562k over the year to December 2024. That's a slight decrease of 6.8% on the prior year. We note that the salary portion, which stands at €420.0k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the French Software industry with market capitalizations between €351m and €1.4b, we discovered that the median CEO total compensation of that group was €596k. This suggests that Lectra remunerates its CEO largely in line with the industry average. Furthermore, Daniel Harari directly owns €123m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 40% of total compensation represents salary and 60% is other remuneration. It's interesting to note that Lectra pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Lectra SA's Growth

Over the past three years, Lectra SA has seen its earnings per share (EPS) grow by 1.1% per year. In the last year, its revenue is up 10%.

This revenue growth could really point to a brighter future. And, while modest, the EPS growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. 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 Lectra SA Been A Good Investment?

The return of -33% over three years would not have pleased Lectra SA shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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 be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

Shareholders may want to check for free if Lectra insiders are buying or selling shares.

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.