The CAC 40 is the main stock market index of the Paris Stock Exchange. Its ISIN code is FR0003500008 and its ticker code is “PX1”.
| Stock Exchange | Paris Stock Exchange, Paris |
|---|---|
| Type | Representative index of the national economy |
| Operator | Euronext |
| Weighting | Proportional to market capitalizations, liquidity and free float |
| Figures | |
|---|---|
| Creation | December 31, 1987 |
| Number of listed securities | 40 |
| Capitalization | €2,376.82 billion (16 November 2021) |
| Number of points at creation | 1000 |
| ISIN | FR0003500008 |
Created with 1,000 basis points on December 31, 1987, by the Compagnie des agents de change, the CAC 40 index (CAC meaning Cotation Assistée en Continu) is determined from the prices of forty shares listed continuously on the first market among the hundred companies whose exchanges are the most abundant on Euronext Paris, which is part of Euronext, The first European stock exchange. These companies, representative of the different branches of activity, reflect in principle the overall trend of the economy of large French companies and their list is reviewed regularly to maintain this representativeness. It is an index without dividends.
CAC 40 History
Before 1988
The main measure of stock market health in France, the CAC 40 is a relatively recent stock market index. To measure performance before 1988, there is an INSEE index of the Paris Stock Exchange, which experienced a fivefold increase in the 1920s and a new fivefold increase in the 1950s, despite geopolitical uncertainties during these two periods of strong economic growth.
The 1960s and 1970s, however, marked a halt to this trend, as smallholders gradually turned away from a Paris stock exchange that was on a long-term downward trend (the proportion of French people holding shares falling by up to 7% in the 1970s). However, the beginning of the 1980s, despite a gloomy economic context, marked a new reversal of trend since prices finally started to rise again. While the beginnings of financial globalization were felt all over the world, the reforms of the banking system carried out under François Mitterrand – including the banking law of 1984 – paved the way for the Parisian equivalent of the Big Bang of the London Stock Exchange in 1986 and the creation of the CAC 40 stock market index on December 31, 1987.
Main developments
These were previously managed directly by ministerial officers, stockbrokers. Following Law No. 88-70 of 22 January 1988, brokerage firms took over. CAC, which then stood for “Compagnie des Agents de Change”, has now become the acronym for “Continuous Assisted Quotation”: the index, therefore, gives an idea, continuously, of the evolution of the market.
Set to 1,000 points on December 31, 1987, it is at its lowest all-time low, at 893.82 points, on January 29, 1988. But the CAC 40 is officially born on June 15, 1988 and ended the year on December 30, 1988, at 1,573.94 points.
Internet bubble
Driven by the speculative bubble on telecoms media and technology stocks, the CAC 40 reached a high in session on September 4, 2000 at 6,944.77 points, then collapsed to 2,401.15 points on March 12, 2003, its lowest level in session since 1997, against the backdrop of a general decline in indices in Europe and the United States. Since December 1, 2003, like the main global indices, it takes into account not only the market capitalization of companies but also the free float, i.e. the part available on the market. Its value has fluctuated greatly over the past decade (see chart).
Developments since 2005
The CAC 40 rose 6,000 points on May 2, 2007, after rising by 150% in about four years and then reaching on June 1, 2007, 6,168.15 points. In mid-July 2007, the index represented about 70% of the total capitalization of the Paris financial center or 1,300 billion euros. At the beginning of 2008, the capitalization was just under 1,000 billion euros.
On Monday, January 21, 2008, the CAC 40 falls sharply and it returns below 4,200 in July and then below 3,200 on October 10. We can speak of a stock market crisis since the CAC 40 has fallen more than 43.5% since the beginning of January 2008 and nearly 22% in the week of 6 to 10 October 2008.
On Monday, October 13, 2008, the index rose 11.18% to 3,531.50 points, the largest daily gain since its inception. This record came shortly after the reverse record of the largest fall: on Monday, October 6, 2008, the CAC 40 closed down 9.04% to 3,711.98 points. On November 24, 2008, the CAC 40 recorded the second-best increase in its history (+ 10.09%) to 3,172.11 points. However, with a fall of 42.68% over the whole of 2008, the CAC 40 had the worst year in its history. It was not until 2009 that its price returned to a stable value, after a low recorded on March 9, 2009, at 2,465.46 points. The index then rose steadily until 2011, before the crash of July-August 2011.
From July 1, to September 12, 2011, the CAC 40 fell by 28.8% (from 4,007 to 2,855 points). However, it is rapidly rising again, sustainably exceeding 4,000 points since 2013.
Its market capitalization was on August 3, 2011, of €873 billion. In addition, in December 2017, it exceeded €1,500 billion to reach €1,673 billion in April 2018.
While the absence of flagships of new technologies was regularly highlighted, the CAC 40 integrates them in 2017. Thus, in March 2017, the Atos group made its entrance, in September of the same year, it was the turn of STMicroelectronics and then Dassault Systèmes in September 2018 to further strengthen the weight of the technology sector. Finally, in June 2019, Thales joined the CAC 40. In an index long dominated by financial or industrial stocks, the technology sector is gradually finding its place.
The year 2019 was marked by a record distribution of €60.2 billion, including €49.2 billion in dividends and €10.7 billion in share buybacks.
The CAC 40 suffered the largest decline in its history on March 12, 2020: −12.28%, in the midst of the coronavirus health crisis; Stock markets in other countries are experiencing similar falls.
2020 stock market crash triggered by the Covid-19 pandemic and all-time record
Since the end of 2019, the Paris Stock Exchange has been set up at around 6,000 points (historically high zone) thanks to its flagship stocks (KHOL: Kering, Hermès, L’Oréal, LVMH). It experienced a first drop between 27 and 31 January (−5%) following the announcement of the first cases of coronavirus on French territory, a temporary drop however since on Wednesday, February 19, 2020, Paris returned to its record levels (6,111.24 points) since the 2008 crisis.
However, the rise of the coronavirus in Europe (first in Italy) comes to end the party. On Monday, February 24, the CAC 40 lost 3.94% at the beginning of a black month that will reach its peak in the week of March 9 to 13, with Monday, one of the worst falls in the history of the CAC 40 (−8.39%); This day began with the fall in oil prices (-30%) following a diplomatic conflict between OPEC, accompanied by the wave of containment measures taken around the world, threatening the economy with one of the most serious economic crises by its magnitude.
But it was on Thursday, March 12 that recorded the biggest drop in the history of the CAC 40 index: −12.28% to 4,044.26 points. This is its worst session since its inception in 1988. This day is notably marked by the rumors of confinement decided the same evening by the President of the Republic Emmanuel Macron and the disappointment of the announcements of the European Central Bank on the support of the economy.
The CAC 40 continues to lose points until reaching 3,754.84 points on Thursday, March 18. In 1 month, the Parisian index has lost nearly 40% of its value; for comparison, during the economic crisis of 2008, it took 2 years to make the index lose 50% of its value and 3 years during the bursting of the Internet bubble, with also a 50% loss.
The first rebound was also rapid with a recovery of 20% before the end of March. A second sharp increase of 20% took place in November in response to announcements on the effectiveness of the first vaccines.
At the beginning of April 2021, the flagship index of the Paris Stock Exchange exceeded its pre-crisis peak, driven by hopes of recovery. At 6,131.34 points, it is not far from its 2007 record and achieves one of the best performances among the world stock markets since the beginning of the year, thanks to a catch-up of so-called “value” or cyclical stocks. During the summer of 2021, it exceeded 6,800 points, close to its historical record, a record largely exceeded when taking into account dividends.
On November 5, 2021, the CAC 40 exceeded the 7,000-point threshold for the first time.
On Wednesday, January 5, 2022, it reached a record closing of 7,376.37 points. A record in session is also reached in the middle of the afternoon, with 7,384.86 points.
On Thursday, February 16, 2023, at 11:30 am, the CAC 40 reached a new all-time high of 7,387.29 points.
CAC 40 calculation methods
The composition of the CAC 40 is updated quarterly by a committee of experts: the “Scientific Council of Indices (CSI)”. The index must be representative of the Parisian financial market both in terms of floating capitalization and transaction volumes. When a company is no longer listed, it is replaced, in principle, by one of the CAC Next 20 securities meeting the financial requirements for listing in the CAC 40 (liquidity of the share, sufficient market capitalization, significant daily exchange of securities, etc).
Each of the forty companies has its index which is weighted according to the value of its securities available on the market. Weights vary from company to company based on its floating capitalization. When a value quotes upwards, the CAC 40 increases the weighting of the value, all other things being equal. The price of one of the forty securities may be suspended for 15 minutes if it varies by more than 10%, then twice 5% in the same direction. It is then said that the stock is reserved for the rise or fall.
The CAC 40 is published Monday to Friday from 9:00 a.m. to 5:35 p.m., updated every 15 seconds and published in real-time on Euronext. The day begins with a pre-opening phase from 7:15 a.m. to 9:00 a.m. where orders accumulate without any transactions being made. Then, from 9:00 a.m. to 5:35 p.m., the quotation is continuous. The closing price is set at 5:35 p.m. (fixing in stock market jargon) after five minutes where the equilibrium price is calculated to allow the exchange of the largest number of securities.
Each fixing is followed by a five-minute period of “TAL” (trading at last), during which it is possible to enter orders so that they are executed at the fixing price and at this price only.
It is calculated in dividends not reinvested (unlike the German DAX index: which makes any long-term comparison between the two indices absurd). The real value corresponding to this index must be assessed according to various elements such as the valuation taking into account the dividends reinvested. Euronext publishes each month the evolution of the index with dividends or the depreciation due to inflation, measured for example by the price index.
On June 18, 2012, source Euronext, the CAC 40 was calculated as follows:
- Multiplying the last closing price of each share by its number of shares (by free float – capping)
- Add up the amounts
- Divide the sum obtained by the divisor of 184,629,565.030481 (corresponding to the total capitalization on 31 December 1987 (1st quote), multiplied by an adjustment factor K related to the changes that have occurred since then (euros, issue of securities)).
The two official criteria, free float and traded capital, are not, however, automatic criteria “unlike many other indices”. The members of the “Scientific Council for Indices (CSI)” have a margin of appreciation.
CAC 40 reinvested dividends
The version of the CAC 40 with total return, also published every 15 seconds, exists with 2 ISIN codes, depending on whether you are looking for the index with gross dividends reinvested: CAC40 GR (gross total return: QS0011131834 / Mnemo PX1GR]) or with net dividends reinvested: CAC40 NR (Net total return: QS0011131826 / Mnemo PX1NR).
The index with net dividends reinvested is calculated after a withholding tax whose rate is that which would be applied to dividends paid by the securities composing the index to an investment fund based in Luxembourg. This rate is for example 25% for dividends paid by CAC 40 companies whose France is the tax domicile.
The current withholding tax rates came into effect on January 1, 2010. Before that date, the withholding tax taken into account for CAC 40 companies whose France is the tax domicile was 0%. The level of previous indices has not been adjusted.
Remarks
The long-term evolution of the CAC 40 should not be confused with the long-term evolution of all the securities listed on this stock exchange since the stocks that behave badly end up being replaced in its list by others that have taken advantage over them.
The CAC 40 is an index, it is calculated, it cannot be traded as such. On the other hand, a given equity portfolio may set itself the constraint of having the composition as close as possible to that of the CAC 40. Thus, a portfolio comprising at a moment the weighted set of the forty stocks of the current CAC 40 will gradually deviate from the index according to the changes in the index weight of each security, and its evolution will no longer be exactly the same as that of the CAC 40.
However, there is a regulated derivative of the CAC 40, the CAC 40 Index Future, as well as index funds listed and unlisted on the CAC 40.
CAC 40 composition
Current composition
The composition of the CAC 40 is as follows:
| Company | Sector | Index weight (%) | 2020 turnover (in billion euros) | Market capitalization (in billions of euros) | Entry into the index |
|---|---|---|---|---|---|
| Air Liquide | Industrial gas | 3,50 | 20,49 | 66,56 | December 31, 1987 |
| Airbus | Aeronautics, Defense | 3,87 | 49,91 | 74,87 | February 5, 1990 |
| Alstom | Rail industry | 0,43 | 8.78 | 8,17 | September 21, 2020 |
| ArcelorMittal | Steel, building material | 1,16 | 47,57 | 18,98 | November 21, 2003 |
| Axa | Insurance, financial services | 2,69 | 93,91 | 50,76 | December 31, 1987 |
| BNP Paribas | Banking, financial services, insurance | 2,94 | 44,27 | 55,93 | December 31, 1987 |
| Bouygues | construction, real estate, media, telecommunications | 0,58 | 34,69 | 11,02 | December 31, 1987 |
| Capgemini | IT Services | 1,46 | 15,85 | 27,88 | August 3, 1988 |
| Crossroads | distribution | 0,67 | 69,97 | 12,57 | December 31, 1987 |
| Agricultural credit | Banking, financial services, insurance | 1,39 | 20.5 | 26,42 | September 7, 1999 |
| Danone | food processing | 1.93 | 23,62 | 36,02 | December 31, 1987 |
| Dassault Systèmes | IT services, technology | 2,47 | 4,45 | 47,09 | September 24, 2018 |
| Engie | Energy, industrial gas, oil industry | 1,43 | 55,75 | 27,26 | December 31, 1987 |
| EssilorLuxottica | Optics | 3,34 | 14,43 | 64.36 | December 31, 1987 |
| Eurofins Scientific | Biotechnology | 0.76 | 5,44 | 14,47 | September 17, 2021 |
| Hermès International | Luxury | 5,91 | 6,39 | 112,48 | June 18, 2018 |
| Kering | Luxury | 3,19 | 13.1 | 60,76 | February 9, 1995 |
| Legrand | Electrical equipment | 0,99 | 6.1 | 18,71 | December 31, 1987 |
| L’oréal | Cosmetic | 9,28 | 27,99 | 176,65 | December 31, 1987 |
| LVMH | Luxury | 15,38 | 44,65 | 292,76 | December 31, 1987 |
| Recommended | Tyres, automotive supplier, tourism | 0,25 | 20,47 | 18,69 | December 31, 1987 |
| Orange | Telecommunications, banking | 1,58 | 42,27 | 30,01 | November 12, 1997 |
| Pernod Ricard | Liquor | 2,41 | 8,45 | 45,21 | December 31, 1987 |
| Publicis Groupe | Advertising, media | 0,62 | 10,79 | 11.82 | October 1, 2004 |
| Renault | Car | 0,38 | 43,47 | 7.2 | February 9, 1995 |
| Safran | Aeronautics, Defense | 2,13 | 16,63 | 40,63 | September 19, 2011 |
| Saint-Gobain | Building materials, glass | 1,13 | 38,13 | 21,35 | December 31, 1987 |
| Sanofi | Pharmacy | 6,47 | 36,04 | 123,39 | December 31, 1987 |
| Schneider Electric | Electrical equipment | 3,34 | 25,16 | 63,34 | December 31, 1987 |
| Societe Generale | Banking, financial services, insurance | 0,91 | 22,11 | 17,42 | December 31, 1987 |
| Stellantis | Automotive, automotive supplier | 1.93 | 86,68 | 36,81 | December 31, 1987 |
| STMicroelectronics | Technologies | 1,39 | 9,09 | 26,52 | September 18, 2017 |
| Teleperformance | Service Company, Customer Relationship Management | 0,91 | 5,73 | 17,49 | June 22, 2020 |
| Thales | Aerospace equipment manufacturer | 1,35 | 16,99 | 25,64 | June 24, 2019 |
| TotalEnergies | Oil industry, industrial gas | 6,87 | 125,63 | 131,35 | December 31, 1987 |
| Unibail-Rodamco-Westfield | Real estate | 0,36 | 1.9 | 6,81 | June 18, 2007 |
| Veolia | Environment, Energy | 0,87 | 26,01 | 16,55 | December 31, 1987 |
| Vinci | Construction, Real Estate | 2,67 | 43,93 | 51,23 | April 3, 2002 |
| Vivendi | Media, advertising, telecommunications | 0,56 | 16,09 | 10,61 | December 31, 1987 |
| Worldline | FinTech | 0.52 | 2,75 | 9,96 | >March 23, 2020 |
CAC 40 composition history
| Date | Incoming value | Outbound value |
|---|---|---|
| September 17, 2021 | Eurofins Scientific | Atos |
| 21 September 2020 | Alstom | Accor |
| 22 June 2020 | Teleperformance | Sodexo |
| 23 March 2020 | Worldline | TechnipFMC |
| June 24, 2019 | Thales | Valeo and Worldline |
| May 3, 2019 | Worldline (split with Atos) | No |
| September 24, 2018 | Dassault Systèmes | Solvay |
| June 18, 2018 | Hermes | LafargeHolcim |
| September 18, 2017 | STMicroelectronics | Nokia |
| March 20, 2017 | Atos | Klépierre |
| March 21, 2016 | Sodexo | Alstom |
| January 7, 2016 | Nokia | Alcatel Lucent (fusion) |
| December 21, 2015 | Klépierre | EDF |
| March 23, 2015 | PSA Peugeot Citroën | Gemalto |
| June 23, 2014 | Valeo | Vallourec |
| December 23, 2013 | Alcatel-Lucent | STMicroelectronics |
| December 24, 2012 | Gemalto | Alcatel-Lucent |
| September 24, 2012 | Solvay | PSA Peugeot Citroën |
| December 19, 2011 | Legrand | Suez Environnement |
| September 19, 2011 | Safran | Natixis |
| September 20, 2010 | Natixis | Dexia |
| Publicis | Lagardère | |
| September 21, 2009 | Technip | Air France-KLM |
| September 22, 2008 | Suez Environnement (split) | None |
| July 22, 2008 | GDF Suez | GDF and Suez (merger) |
| September 3, 2007 | ArcelorMittal | Mittal Steel (merger) |
| June 18, 2007 | Air France-KLM | AGF |
| Unibail-Rodamco | Thomson | |
| December 18, 2006 | Vallourec | Publicis |
| September 18, 2006 | Mittal Steel | Arcelor (OPA) |
| July 28, 2006 | Alstom | Thales |
| December 19, 2005 | EDF | TF1 |
| September 1, 2005 | Gases of France | Casino |
| January 3, 2005 | Essilor International | Sodexo |
| October 1, 2004 | Publicis | Aventis (acquired by Sanofi) |
| November 21, 2003 | Arcelor | Orange |
| July 11, 2003 | Pernod Ricard | Crédit lyonnais (OP of Crédit Agricole) |
| August 6, 2002 | Agricultural credit | Dassault Systèmes |
| April 3, 2002 | Vinci | Alstom |
| August 8, 2001 | Vivendi Environnement | Valeo |
| May 4, 2001 | Orange | Equant |
| December 21, 2000 | Dassault Systèmes | Canal+ (merger with Vivendi) |
| December 11, 2000 | Vivendi Universal | Vivendi (merger with Canal+) |
| August 23, 2000 | Thomson Multimedia | France trade credit (HSBC OPE) |
| July 10, 2000 | EADS | Aerospatiale-Matra |
| May 10, 2000 | TF1 | Legrand |
| December 6, 1999 | Dexia | Dexia France (takeover bid of Dexia Belgium) |
| November 5, 1999 | Aerospatiale-Matra | Elf Aquitaine (TotalFina’s OPE) |
| Alstom | Promodès (Carrefour OPE) | |
| October 29, 1999 | Bouygues | Eridania Beghin Say |
| September 20, 1999 | Equant | Pen |
| September 7, 1999 | Cl | Paribas (takeover bid of Société Générale then BNP) |
| May 25, 1999 | Sanofi Synthélabo | Sanofi (merger with Synthélabo) |
| March 3, 1999 | Casino | Usinor |
| May 26, 1998 | Paribas | Compagnie financière de Paribas (merger with Banque Paribas) |
| May 22, 1998 | Sodexho | Havas |
| February 13, 1998 | Cape Gemini | Compagnie bancaire (OPE de Paribas) |
| November 12, 1997 | France Telecom | Bouygues |
| SGS Thomson Microelectronics | Pernod Ricard | |
| July 25, 1997 | Usinor | Compagnie de Suez (merger with Lyonnaise des Eaux) |
| February 24, 1997 | Valeo | Saint Louis |
| Pen | Eurotunnel | |
| AGF | UAP (acquisition by Axa) | |
| November 14, 1995 | Eridania Beghin Say | Crédit foncier de France |
| February 9, 1995 | Renault | Euro Disney |
| Pinault-Spring-Redoute | Casino | |
| Eurotunnel | CGIP | |
| April 20, 1994 | Lagardère SCA | Matra-Hachette (merger) |
| November 17, 1993 | Promodès | Club Méditerranée |
| Local credit from France | Chargers | |
| BNP | Cape Gemini | |
| February 22, 1993 | Poulenc | Matra (merger with Hachette) |
| March 19, 1992 | Euro Disney | Source Perrier (Nestlé takeover bid) |
| December 2, 1991 | Total | Arjomari-Prioux (Saint Louis takeover bid) |
| December 10, 1990 | Schneider Ltd | Merlin Gerin (buyout) |
| Source Perrier | Dumez (acquisition by Lyonnaise des Eaux) | |
| February 5, 1990 | Canal+ | Essilor |
| Matra | Mixed navigation (merger with Allianz) | |
| PSU | Pechelbronn | |
| August 1, 1989 | RTC | Alcatel |
| 1989 | Axa | Compagnie du Midi (Acquisition by Axa) |
| August 3, 1988 | Cape Gemini | Darty (internal takeover bid) |
| May 27, 1988 | Suez | Générale Occidentale (CGE takeover bid) |
| Merlin Gerin | Telemecania (Schneider’s takeover bid) |
Ownership by foreign investors
According to the Banque de France’s 2019 annual study of the 36 CAC 40 companies resident in France, foreign investors held only €557 billion of CAC 40 shares at the end of 2018, representing a holding rate of 42.2%, compared with 43.1% at the end of 2017 and 48% in 2013. This decrease is mainly due to a change in the composition of the index. Foreign holders of French equities are 44.2% from the eurozone, 33% from the United States and 6.4% from the United Kingdom; The share of French companies majority-owned by foreign interests (10 out of 36, or 28%) fell to its lowest level since 2008.
The participation of foreign investors in the capital of all French companies (37.8% in total, knowing that this rate is 27.6% for non-CAC 40 securities) is much lower than in other European countries: non-residents hold about 50% of all shares listed in Italy, Spain and Germany, around 60% in the UK and Belgium and almost 90% in the Netherlands.
According to the Banque de France’s 2014 study, non-residents accounted for 46.7% of the total market capitalization of the CAC 40 at the end of 2013; More than half of the groups in the index are more than 50% owned by foreign investors, including 4 at more than 60%. Two sectors are majority-owned by foreign shareholders: healthcare and oil, gas and materials; Conversely, utilities are very Franco-French. The share of non-residents increased from 46.3% to 46.7% in 2013 (and by five points since 2010, after a fall in 2007) due to their net purchases of €15.3 billion, while French investors were net sellers of €10 billion; On the other hand, price movements reduced the increase in the share of non-residents, as the most international stocks lagged behind the stock market.
Another annual study, published by the IMF, specifies the distribution of these non-residents: 18.8% Europeans, 15.9% Americans and 3.4% British. This internationalization of shareholding is to be compared with that of the activity of CAC 40 groups: 70% of their turnover is located abroad as well as two-thirds of their workforce. In April 2014, the financial analysis firm Alphavalue estimated that 49.9% of the share of the capital of CAC 40 companies is held by foreign investors and that 27% is controlled by sovereign wealth funds, notably Norwegian and Qatari.
According to Laurent Mauduit, “the rate of ownership of the capital of French CAC 40 groups by foreign investment funds, including Anglo-Saxon pension funds, rose from about 5% in 1985 to more than 47 or 48% at the end of the nineties — beyond 60% for some firms”. He points out that the CAC 40 equivalents in the United States and the United Kingdom ” experience much lower foreign ownership rates of their national champions: around 20% in the first case and less than 30% in the second”, in particular, because of the presence of funded pensions in these countries.
Wage
Between 2006 and 2011, the salaries of all CAC 40 companies increased by 13%, the workforce by 10% for a 25% growth in the wage bill. However, more than a third are precarious jobs: fixed-term contracts and traineeships, involuntary part-time work, jobs below the level of qualification. In 2006, CAC 40 companies employed 3.8 million employees and 4.8 million employees in 2016.
Distribution of dividends
According to a report by Oxfam and Basic in May 2018, the rate of distribution of profits of CAC 40 companies to their shareholders reached 67.4% between 2009 and 2014, the highest rate among the world’s main stock exchanges; This rate is twice as high as in the 2000s. It reaches 80% in companies in which the French State is a shareholder. The record annual total amount of CAC 40 dividends reached a record in 2007 (57 billion euros), whose levels of 2014 and 2016 were close (56 billion euros).
Patrick Artus, director of research and research at Natixis bank, considers Oxfam’s analysis ” biased”, in particular, because it does not take into account the fact that shareholder remuneration depends not only on the payment of the dividend but also on the share price: “In France, Companies pay fairly high dividends. But the total return on capital for shareholders is around 9%, which is probably acceptable and is much lower than in the United States, where it reaches 14% while dividends are low and shareholders are remunerated by the rise in stock prices due in particular to share buybacks by companies”.
Moreover, adding up the dividends paid is a misleading calculation, as it sometimes amounts to counting the same dividends several times. Most CAC 40 companies have as shareholders not only natural persons but also other companies. However, as Rémy Prud’homme, professor of economics, explains, accounting for the dividends that companies “pay to each other (…) is like counting the same thing two or three times.” As of December 31, 2018, only 12.4% of Total’s shareholders were natural persons, the rest were companies. To know the net amount received by shareholders, it would be necessary to know how many dividends CAC 40 companies pay to each other.
CAC 40 groups paid €57.4 billion to their shareholders in 2018, representing an increase of 12.8% over one year and 62% over ten years.
CAC 40 executive income
In 2010, the managers of CAC 40 companies received an average of 4.11 million euros, an increase of 34% compared to 2009.
In 2013, the average salary for a CAC 40 boss was 2.25 million euros.
In 2016, the average remuneration of a CAC 40 boss amounted to 4.5 million euros.
Executive compensation grew by 46% between 2009 and 2016, twice as fast as the average employee. 54.5% of their remuneration depends on the share price and 29% on the evolution of earnings.
Cumulation of directors
CAC 40 companies are managed by a reduced number of directors. Indeed, 39 of these companies have at least one common director. In 2010, Total, GDF Suez and BNP Paribas are the most connected with 19 links each with other CAC 40 companies followed by Saint-Gobain with 18 links, and AXA with 17 while Lafarge and Sanofi-Aventis each have 15 links with other companies.
Taxation in the CAC 40 companies
In 2019 CAC 40 companies paid 37 billion € in corporate taxes in France (excluding corporate taxes paid in the rest of the world) according to calculations by the Molinari Economic Institute, a liberal think tank. This represents more than half of the 67 billion € budgeted in the Finance Act regarding of corporation tax for the same year. According to the French Council of Compulsory Levies (CPO) and the Treasury, the implicit tax rate (before tax deficits) is 23.5% on large companies in France, against 22 to 27% on smaller companies.
Taxes paid by CAC 40 companies increased between 2009 and 2014 by 28%. Between 2010 and 2017 according to the anti-globalization organization Attac, taxes paid by CAC 40 companies fell by 6.4%, while their profits are increasing. The Oxfam and Basic report of May 2018 identifies 1,454 subsidiaries of CAC 40 companies in tax or legal havens in 2016, 85 more than in 2008.
Environmental impact of the CAC 40
The Observatory of Multinationals estimates that in 2019, the CAC 40 emitted 1.6 billion tons of CO2 in 2019, taking into account indirect emissions, compared to 441 million tons of annual emissions recorded for the entire France. If this total is down 3% compared to 2017, this is only due to Engie’s gradual withdrawal from coal.
In 2021, Oxfam published a report on the climate trajectories of 35 CAC 40 companies, according to which:
- the average annual carbon footprint of CAC 40 companies reaches 125 million tonnes of CO2, i.e. a quarter of French emissions;
- the activities of the companies concerned do not comply with the objectives of the Paris Climate Agreement, with the exception of EDF, Schneider Electric and Legrand;
- the three companies that emit the most greenhouse gases are banks: BNP Paribas, Société Générale and Crédit Agricole, particularly because of their financing of fossil fuels.
Annual performance history
The annual performance of the CAC 40 has been closer to that of the Dow Jones, the major stock markets being increasingly dependent on each other for fifteen years.
Annual performance is calculated on December 31, of each year.
CAC 40: calculated excluding dividends (FR0003500008, PX1)CAC 40 GR: calculated gross dividends reinvested (QS0011131834, PX1GR) CAC 40 NR: calculated net dividends reinvested (QS0011131826, PX1NR)Since 1 January 2010, the withholding tax rate taken into account for the calculation of the CAC40 NR index (net dividends reinvested)) has changed. For example, for CAC40 companies domiciled for tax purposes in France, the rate taken into account has increased from 0% to 25%. The level of previous indices has not been adjusted.
| Year | Value | Performance | Value | Performance | Value | Performance | ||
|---|---|---|---|---|---|---|---|---|
| 1987 | 1 000,00 | – | 1 000,00 | – | 1 000,00 | – | ||
| 1988 | 1 573,94 | + 57,4 % | 1 623,50 | + 62,35 % | 1 606,82 | + 60,68 % | ||
| 1989 | 2 001,08 | + 29,5 % | 2 124,53 | + 30,86 % | 2 082,58 | + 29,61 % | ||
| 1990 | 1 517,93 | – 24,06 % | 1 657,91 | – 21,96 % | 1 609,91 | – 22,70 % | ||
| 1991 | 1 765,66 | + 15,5 % | 1 996,10 | + 20,40 % | 1 916,19 | + 19,02 % | ||
| 1992 | 1 857,78 | + 5,2 % | 2 169,57 | + 8,69 % | 2 060,31 | + 7,52 % | ||
| 1993 | 2 268,22 | + 22,1 % | 2 735,38 | + 26,08 % | 2 570,48 | + 24,76 % | ||
| 1994 | 1 881,15 | – 17,5 % | 2 340,49 | – 14,44 % | 2 176,64 | – 15,32 % | ||
| 1995 | 1 871,97 | – 4,30 % | 2 406,75 | + 2,83 % | 2 213,92 | + 1,71 % | ||
| 1996 | 2 315,73 | + 23,24 % | 3 070,84 | + 27,59 % | 2 795,90 | + 26,29 % | ||
| 1997 | 2 998,91 | + 29,34 % | 4 082,82 | + 32,95 % | 3 684,87 | + 31,80 % | ||
| 1998 | 3 942,66 | + 37,31 % | 5 473,60 | + 34,06 % | 4 908,03 | + 33,19 % | ||
| 1999 | 5 958,32 | + 51,12 % | 8 437,21 | + 54,14 % | 7 515,81 | + 53,13 % | ||
| 2000 | 5 926,42 | – 0,54 % | 8 517,60 | + 0,95 % | 7 550,48 | + 0,46 % | ||
| 2001 | 4 624,58 | – 21,97 % | 6 786,03 | – 20,33 % | 5 975,25 | – 20,86 % | ||
| 2002 | 3 063,91 | – 33,75 % | 4 619,70 | – 31,92 % | 4 032,77 | – 32,51 % | ||
| 2003 | 3 557,90 | + 16,12 % | 5 537,81 | + 19,87 % | 4 785,01 | + 18,65 % | ||
| 2004 | 3 821,16 | + 7,40 % | 6 168,94 | + 11,40 % | 5 268,31 | + 10,10 % | ||
| 2005 | 4 715,23 | + 23,40 % | 7 809,80 | + 26,60 % | 6 669,63 | + 26,60 % | ||
| 2006 | 5 541,76 | + 17,53 % | 9 440,04 | + 20,87 % | 8 061,85 | + 20,87 % | ||
| 2007 | 5 614,08 | + 1,31 % | 9 832,90 | + 4,16 % | 8 397,36 | + 4,16 % | ||
| 2008 | 3 217,97 | – 42,68 % | 5 866,91 | – 40,33 % | 5 010,38 | – 40,33 % | ||
| 2009 | 3 936,33 | + 22,32 % | 7 484,93 | + 27,58 % | 6 391,72 | + 27,57 % | ||
| 2010 | 3 804,78 | – 3,34 % | 7 526,34 | + 0,55 % | 6 364,57 | – 0,42 % | ||
| 2011 | 3 159,81 | – 16,95 % | 6 518,67 | – 13,39 % | 5 455,49 | – 14,28 % | ||
| 2012 | 3 641,07 | + 15,23 % | 7 846,44 | + 20,37 % | 6 482,85 | + 18,83 % | ||
| 2013 | 4 295,95 | + 17,99 % | 9 589,71 | + 22,22 % | 7 840,99 | + 20,95 % | ||
| 2014 | 4 272,75 | – 0,54 % | 9 849,44 | + 2,71 % | 7 976,45 | + 1,73 % | ||
| 2015 | 4 637,06 | + 8,53 % | 11 025,92 | + 11,94 % | 8 847,82 | + 10,92 % | ||
| 2016 | 4 862,31 | + 4,86 % | 12 005,34 | + 8,88 % | 9 526,48 | + 7,67 % | ||
| 2017 | 5 312,56 | + 9,26 % | 13 533,27 | + 12,73 % | 10 639,79 | + 11,69 % | ||
| 2018 | 4 730,83 | – 10,95 % | 12 450,61 | – 8,00 % | 9 694,98 | – 8,88 % | ||
| 2019 | 5 978,06 | + 26,37 % | 16 242,10 | + 30,46 % | 12 529,62 | + 29,24 % | ||
| 2020 | 5 551,41 | – 7,14 % | 15 436,40 | – 4,96 % | 11 834,28 | – 0,06 % | ||
| 2021 | 7 153,03 | + 28,85 % | 20 357,80 | + 31,88 % | 15 507,85 | + 31,04 % |
References (sources)
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