Shareholders May Find It Hard To Justify Increasing Solutions 30 SE's (EPA:S30) CEO Compensation For Now

Key Insights

• Solutions 30 will host its Annual General Meeting on 17th of June
• Total pay for CEO Gianbeppi Fortis includes €400.4k salary
• The total compensation is similar to the average for the industry
• Solutions 30's EPS declined by 103% over the past three years while total shareholder loss over the past three years was 61%

The underwhelming share price performance of Solutions 30 SE (EPA:S30) in the past three years would have disappointed many shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 17th of June and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for Solutions 30

How Does Total Compensation For Gianbeppi Fortis Compare With Other Companies In The Industry?

At the time of writing, our data shows that Solutions 30 SE has a market capitalization of €217m, and reported total annual CEO compensation of €599k for the year to December 2023. We note that's an increase of 53% above last year. We note that the salary portion, which stands at €400.4k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the French IT industry with market caps ranging from €93m to €372m, we found that the median CEO total compensation was €516k. From this we gather that Gianbeppi Fortis is paid around the median for CEOs in the industry. Moreover, Gianbeppi Fortis also holds €34m worth of Solutions 30 stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 47% of total compensation represents salary and 53% is other remuneration. According to our research, Solutions 30 has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Solutions 30 SE's Growth

Solutions 30 SE has reduced its earnings per share by 103% a year over the last three years. In the last year, its revenue is up 17%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Solutions 30 SE Been A Good Investment?

Few Solutions 30 SE shareholders would feel satisfied with the return of -61% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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 1 warning sign for Solutions 30 that you should be aware of before investing.

Important note: Solutions 30 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. 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.