How Should Investors Feel About Adecco Group AG's (VTX:ADEN) CEO Pay?

Alain Dehaze has been the CEO of Adecco Group AG (VTX:ADEN) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Adecco Group

How Does Alain Dehaze's Compensation Compare With Similar Sized Companies?

According to our data, Adecco Group AG has a market capitalization of CHF9.5b, and paid its CEO total annual compensation worth €4.2m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €1.5m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations over CHF7.8b and the median CEO total compensation was CHF4.3m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

That means Alain Dehaze receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

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

Is Adecco Group AG Growing?

Over the last three years Adecco Group AG has shrunk its earnings per share by an average of 16% per year (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Adecco Group AG Been A Good Investment?

Given the total loss of 7.4% over three years, many shareholders in Adecco Group AG are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Alain Dehaze is paid around what is normal the leaders of larger companies.

After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Adecco Group (free visualization of insider trades).

Important note: Adecco Group 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.

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.

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