What We Learned About Veolia Environnement's (EPA:VIE) CEO Pay

Antoine Frérot has been the CEO of Veolia Environnement S.A. (EPA:VIE) since 2009, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Veolia Environnement.

View our latest analysis for Veolia Environnement

How Does Total Compensation For Antoine Frérot Compare With Other Companies In The Industry?

According to our data, Veolia Environnement S.A. has a market capitalization of €11b, and paid its CEO total annual compensation worth €3.0m over the year to December 2019. That's a modest increase of 3.3% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at €980k.

In comparison with other companies in the industry with market capitalizations over €6.5b , the reported median total CEO compensation was €4.8m. That is to say, Antoine Frérot is paid under the industry median. Moreover, Antoine Frérot also holds €799k worth of Veolia Environnement stock directly under their own name.

On an industry level, around 34% of total compensation represents salary and 66% is other remuneration. Although there is a difference in how total compensation is set, Veolia Environnement more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Veolia Environnement S.A.'s Growth

Veolia Environnement S.A.'s earnings per share (EPS) grew 9.1% per year over the last three years. Its revenue is down 2.8% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one 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 Veolia Environnement S.A. Been A Good Investment?

Veolia Environnement S.A. has not done too badly by shareholders, with a total return of 7.5%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As previously discussed, Antoine is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, EPS growth and shareholder returns over the past three years have not impressed us. Consequently, despite CEO compensation being reasonable by all accounts, shareholders will likely want to see more growth before they agree to a potential bump.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Veolia Environnement (1 can't be ignored!) that you should be aware of before investing here.

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. 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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