Yahoo Finance Is Carmat SA's (EPA:ALCAR) CEO Being Overpaid?
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Stéphane Piat has been the CEO of Carmat SA (EPA:ALCAR) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Carmat
How Does Stéphane Piat's Compensation Compare With Similar Sized Companies?
According to our data, Carmat SA has a market capitalization of €216m, and pays its CEO total annual compensation worth €4.8m. (This is based on the year to December 2018). Notably, that's an increase of 65% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €409k. When we examined a selection of companies with market caps ranging from €89m to €356m, we found the median CEO total compensation was €260k.
As you can see, Stéphane Piat is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Carmat SA is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Carmat has changed from year to year.
Is Carmat SA Growing?
On average over the last three years, Carmat SA has shrunk earnings per share by 4.4% each year (measured with a line of best fit). In the last year, its revenue is down -50%.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Carmat SA Been A Good Investment?
With a three year total loss of 35%, Carmat SA would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We examined the amount Carmat SA pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Over the same period, investors would have come away with nothing in the way of share price gains. This contrasts with the growth in CEO remuneration, year on year. Some might well form the view that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Carmat (free visualization of insider trades).
Important note: Carmat may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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. Thank you for reading.
