Is ArcelorMittal (AMS:MT) Overpaying Its CEO?

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In 1976 Lakshmi Mittal was appointed CEO of ArcelorMittal (AMS:MT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for ArcelorMittal

How Does Lakshmi Mittal’s Compensation Compare With Similar Sized Companies?

Our data indicates that ArcelorMittal is worth €20b, and total annual CEO compensation is US$3.8m. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.5m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$4.1m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).

So Lakshmi Mittal receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at ArcelorMittal, below.

ENXTAM:MT CEO Compensation, February 19th 2019
ENXTAM:MT CEO Compensation, February 19th 2019

Is ArcelorMittal Growing?

On average over the last three years, ArcelorMittal has grown earnings per share (EPS) by 104% each year (using a line of best fit). In the last year, its revenue is up 11%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has ArcelorMittal Been A Good Investment?

Most shareholders would probably be pleased with ArcelorMittal for providing a total return of 151% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

Remuneration for Lakshmi Mittal is close enough to the median pay for a CEO of a large company .

The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ArcelorMittal (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.