Eric Rondolat has been the CEO of Signify N.V. (AMS:LIGHT) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Signify pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Signify N.V.'s CEO Compensation With the industry
According to our data, Signify N.V. has a market capitalization of €4.6b, and paid its CEO total annual compensation worth €2.8m over the year to December 2019. We note that's an increase of 10% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €871k.
On comparing similar companies from the same industry with market caps ranging from €3.3b to €10b, we found that the median CEO total compensation was €2.3m. From this we gather that Eric Rondolat is paid around the median for CEOs in the industry. Moreover, Eric Rondolat also holds €6.1m worth of Signify 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 58% of total compensation represents salary and 42% is other remuneration. It's interesting to note that Signify allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Signify N.V.'s Growth
Over the past three years, Signify N.V. has seen its earnings per share (EPS) grow by 1.5% per year. It achieved revenue growth of 2.4% over the last year.
We'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Signify N.V. Been A Good Investment?
With a total shareholder return of 27% over three years, Signify N.V. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
As previously discussed, Eric is compensated close to the median for companies of its size, and which belong to the same industry. However, EPS and total shareholder return are solid yet uninspiring. We'd say that Eric is remunerated reasonably, but shareholders might be looking for better returns before they agree Eric deserves a raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Signify that you should be aware of before investing.
Switching gears from Signify, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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