Does Groupe Open's (EPA:OPN) CEO Salary Compare Well With The Performance Of The Company?

By
Simply Wall St
Published
October 27, 2020
ENXTPA:OPN

Frederic Sebag is the CEO of Groupe Open (EPA:OPN), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Groupe Open pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Groupe Open

Comparing Groupe Open's CEO Compensation With the industry

At the time of writing, our data shows that Groupe Open has a market capitalization of €121m, and reported total annual CEO compensation of €313k for the year to December 2019. That's a fairly small increase of 4.1% over the previous year. We note that the salary portion, which stands at €250.4k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under €169m, the reported median total CEO compensation was €298k. This suggests that Groupe Open remunerates its CEO largely in line with the industry average. Furthermore, Frederic Sebag directly owns €18m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20192018Proportion (2019)
Salary €250k €250k 80%
Other €63k €51k 20%
Total Compensation€313k €301k100%

Speaking on an industry level, nearly 57% of total compensation represents salary, while the remainder of 43% is other remuneration. It's interesting to note that Groupe Open pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ENXTPA:OPN CEO Compensation October 27th 2020

Groupe Open's Growth

Over the last three years, Groupe Open has shrunk its earnings per share by 25% per year. In the last year, its revenue is down 5.0%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Groupe Open Been A Good Investment?

Given the total shareholder loss of 46% over three years, many shareholders in Groupe Open are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Groupe Open pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Groupe Open that investors should look into moving forward.

Important note: Groupe Open 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.

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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.
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