We Think The Compensation For Engie SA's (EPA:ENGI) CEO Looks About Right

Key Insights

• Engie to hold its Annual General Meeting on 30th of April
• Salary of €1.00m is part of CEO Catherine MacGregor's total remuneration
• Total compensation is 32% below industry average
• Over the past three years, Engie's EPS fell by 38% and over the past three years, the total shareholder return was 60%

Shareholders may be wondering what CEO Catherine MacGregor plans to do to improve the less than great performance at Engie SA (EPA:ENGI) recently. At the next AGM coming up on 30th of April, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

Check out our latest analysis for Engie

How Does Total Compensation For Catherine MacGregor Compare With Other Companies In The Industry?

At the time of writing, our data shows that Engie SA has a market capitalization of €39b, and reported total annual CEO compensation of €4.1m for the year to December 2023. That's a notable increase of 9.3% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.0m.

In comparison with other companies in the France Integrated Utilities industry with market capitalizations over €7.5b, the reported median total CEO compensation was €6.0m. In other words, Engie pays its CEO lower than the industry median. Moreover, Catherine MacGregor also holds €1.1m worth of Engie stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	€1.0m	€1.0m	25%
Other	€3.1m	€2.7m	75%
Total Compensation	€4.1m	€3.7m	100%

On an industry level, around 41% of total compensation represents salary and 59% is other remuneration. In Engie's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Engie SA's Growth

Over the last three years, Engie SA has shrunk its earnings per share by 38% per year. In the last year, its revenue is down 12%.

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 Engie SA Been A Good Investment?

Most shareholders would probably be pleased with Engie SA for providing a total return of 60% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Engie that investors should be aware of in a dynamic business environment.

Important note: Engie 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.