Franck Hattab became the CEO of Rallye SA (EPA:RAL) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Rallye

How Does Franck Hattab's Compensation Compare With Similar Sized Companies?

According to our data, Rallye SA has a market capitalization of €357m, and paid its CEO total annual compensation worth €838k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at €450k. We looked at a group of companies with market capitalizations from €180m to €722m, and the median CEO total compensation was €393k.

It would therefore appear that Rallye SA pays Franck Hattab more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Rallye has changed from year to year.

Is Rallye SA Growing?

Rallye SA has increased its earnings per share (EPS) by an average of 1.1% a year, over the last three years (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

I would argue that the lack of revenue growth in the last year is less than ideal, but the improvement in EPS is good. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has Rallye SA Been A Good Investment?

With a three year total loss of 47%, Rallye SA would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by Rallye SA, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Rallye.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.