Most Shareholders Will Probably Agree With ALD S.A.'s (EPA:ALD) CEO Compensation

Key Insights

• ALD to hold its Annual General Meeting on 14th of May
• CEO Tim Albertsen's total compensation includes salary of €702.1k
• The total compensation is 65% less than the average for the industry
• Over the past three years, ALD's EPS fell by 17% and over the past three years, the total loss to shareholders 28%

Shareholders may be wondering what CEO Tim Albertsen plans to do to improve the less than great performance at ALD S.A. (EPA:ALD) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 14th of May. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for ALD

Comparing ALD S.A.'s CEO Compensation With The Industry

At the time of writing, our data shows that ALD S.A. has a market capitalization of €5.8b, and reported total annual CEO compensation of €1.5m for the year to December 2023. We note that's a decrease of 8.6% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €702k.

For comparison, other companies in the France Transportation industry with market capitalizations ranging between €3.7b and €11b had a median total CEO compensation of €4.2m. This suggests that Tim Albertsen is paid below the industry median. What's more, Tim Albertsen holds €401k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	€702k	€493k	47%
Other	€781k	€1.1m	53%
Total Compensation	€1.5m	€1.6m	100%

On an industry level, roughly 47% of total compensation represents salary and 53% is other remuneration. Although there is a difference in how total compensation is set, ALD more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at ALD S.A.'s Growth Numbers

ALD S.A. has reduced its earnings per share by 17% a year over the last three years. Its revenue is up 92% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 ALD S.A. Been A Good Investment?

Given the total shareholder loss of 28% over three years, many shareholders in ALD S.A. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which is significant) in ALD we think you should know about.

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.