This article will reflect on the compensation paid to Claude Girod who has served as CEO of Signaux Girod S.A. (EPA:GIRO) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Signaux Girod.
See our latest analysis for Signaux Girod
How Does Total Compensation For Claude Girod Compare With Other Companies In The Industry?
At the time of writing, our data shows that Signaux Girod S.A. has a market capitalization of €17m, and reported total annual CEO compensation of €207k for the year to September 2020. Notably, that's an increase of 17% over the year before. In particular, the salary of €156.6k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below €165m, reported a median total CEO compensation of €207k. This suggests that Signaux Girod remunerates its CEO largely in line with the industry average.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | €157k | €153k | 76% |
| Other | €50k | €23k | 24% |
| Total Compensation | €207k | €176k | 100% |
Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. There isn't a significant difference between Signaux Girod and the broader market, in terms of salary allocation in the overall compensation package. 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.
A Look at Signaux Girod S.A.'s Growth Numbers
Over the last three years, Signaux Girod S.A. has shrunk its earnings per share by 18% per year. Its revenue is down 13% over the previous year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Signaux Girod S.A. Been A Good Investment?
Since shareholders would have lost about 1.1% over three years, some Signaux Girod S.A. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As previously discussed, Claude is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red 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 pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Signaux Girod (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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About ENXTPA:ALGIR
Signaux Girod
Designs, manufactures, markets, installs, and maintains sign equipment in France.
Excellent balance sheet, good value and pays a dividend.
