Stock Analysis

What Did Constellium's (NYSE:CSTM) CEO Take Home Last Year?

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NYSE:CSTM
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Jean-Marc Germain has been the CEO of Constellium SE (NYSE:CSTM) since 2016, 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 Constellium.

See our latest analysis for Constellium

How Does Total Compensation For Jean-Marc Germain Compare With Other Companies In The Industry?

At the time of writing, our data shows that Constellium SE has a market capitalization of US$1.9b, and reported total annual CEO compensation of €6.6m for the year to December 2019. That's a fairly small increase of 3.8% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at €959k.

In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was €3.1m. Hence, we can conclude that Jean-Marc Germain is remunerated higher than the industry median. Moreover, Jean-Marc Germain also holds US$4.8m worth of Constellium stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20192018Proportion (2019)
Salary €959k €869k 15%
Other €5.6m €5.4m 85%
Total Compensation€6.6m €6.3m100%

On an industry level, around 36% of total compensation represents salary and 64% is other remuneration. In Constellium'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.

ceo-compensation
NYSE:CSTM CEO Compensation December 29th 2020

A Look at Constellium SE's Growth Numbers

Constellium SE has reduced its earnings per share by 4.4% a year over the last three years. It saw its revenue drop 16% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Constellium SE Been A Good Investment?

With a total shareholder return of 23% over three years, Constellium SE shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, Constellium SE is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look great when you realize that the company has been suffering from negative EPS growth for the last three years. And shareholder returns are decent but not great. So you can understand why we do not think CEO compensation is particularly modest!

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Constellium that investors should look into moving forward.

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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