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Comparison with industry indices
In a completely different and certainly less apocalyptic context, Jean-Pierre Clamadieu was one of the highest paid bosses of the Bel 20 (more than 4 million in 2018), while he had a poor stock market performance during the time he ran Solvay. From 2012 to 2018, the stock only increased by 1.5% (24% including dividends), while the Stoxx Chemicals index rose by 69% (including dividends) over the same period. This poor performance can be explained in particular by the acquisition of Cytec in the USA in December 2015, which was considered too expensive. Ilham Kadri has performed better than her predecessor since taking control of Solvay in early 2019 (+62% including dividends). but it also remained “below average” compared to the industry index over the period (+82% including dividends).
Carlos Brito, the former boss of AB Inbev, holds the record as the highest paid Bel 20 boss thanks to his stock options that earned him almost 100 million euros. As for “its” stock market performance, it is 438% between November 2008 and July 2021 (taking reinvested dividends into account). This is better than the Stoxx Food & Beverage Index (+395%). However, Xavier Servais, managing director of Delande, recalls that AB Inbev’s share price was “particularly low in 2008, as the stock market was weakened after the bankruptcy of Lehman Brothers and also after a massive capital increase (8 for 5 to 6.45 euros) had fallen).
Solvay CEO receives special bonus to reward “exceptional performance”
Olivier Chapelle at Recticel
Let’s also take the example of Olivier Chapelle, the former boss of Recticel. In 2022, he was entitled to compensation of 5.13 million euros, including a bonus of 3.5 million euros, one of the highest salaries of listed Belgian companies. According to the 2022 annual report published in 2023, the aim of this bonus is to compensate for “the one-off strategic realignment” of the group while at the same time achieving a certain development in the share price. However, a few months later, Olivier Chapelle was fired due to mixed results, marked by the sale of the Technical Foams subsidiary at a lower price than expected. Which caused the stock price to fall. Since his appointment in 2009, the stock has gained 385% (including reinvested dividends). This remains below the performance of Stoxx Chemicals (+490%).
As a counterexample, there is Michael O’Leary, the boss and shareholder of Ryanair. Since the airline’s IPO at the end of May 1997 to the present, in just over 26 years, the rise in the share price has provided a return of 4,433% (with dividends reinvested), or 15.4% per year. Given the phenomenal share price increase, Michael O’Leary is entitled to a stock option plan that should enable him to collect around 100 million euros. Ryanair shareholders don’t seem offended. We will understand why…
Astronomical bonuses from bosses: calculated in many ways and always justified?
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