Is Eurofins Scientific SE's (EPA:ERF) CEO Salary Justified?
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The CEO of Eurofins Scientific SE (EPA:ERF) is Gilles Martin. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Eurofins Scientific
How Does Gilles Martin's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Eurofins Scientific SE has a market cap of €6.6b, and is paying total annual CEO compensation of €1.2m. (This is based on the year to December 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth €1.2m. We examined companies with market caps from €3.6b to €11b, and discovered that the median CEO total compensation of that group was €2.0m.
A first glance this seems like a real positive for shareholders, since Gilles Martin is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Eurofins Scientific has changed from year to year.
Is Eurofins Scientific SE Growing?
Eurofins Scientific SE has increased its earnings per share (EPS) by an average of 29% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 27%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.
Has Eurofins Scientific SE Been A Good Investment?
With a total shareholder return of 15% over three years, Eurofins Scientific SE shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
It looks like Eurofins Scientific SE pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Gilles Martin is overcompensated.
It's great to see a company that pays its CEO reasonably, even while growing. It would be an additional positive if insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling Eurofins Scientific shares (free trial).
If you want to buy a stock that is better than Eurofins Scientific, this free list of high return, low debt companies is a great place to look.
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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.
