Yahoo Finance Here's Why Shareholders May Want To Be Cautious With Increasing AC Immune SA's (NASDAQ:ACIU) CEO Pay Packet
Key Insights
AC Immune to hold its Annual General Meeting on 20th of June
Salary of CHF578.0k is part of CEO Andrea Pfeifer's total remuneration
Total compensation is similar to the industry average
Over the past three years, AC Immune's EPS grew by 15% and over the past three years, the total loss to shareholders 46%
In the past three years, the share price of AC Immune SA (NASDAQ:ACIU) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 20th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
View our latest analysis for AC Immune
Comparing AC Immune SA's CEO Compensation With The Industry
According to our data, AC Immune SA has a market capitalization of US$444m, and paid its CEO total annual compensation worth CHF2.7m over the year to December 2023. That's a notable increase of 69% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CHF578k.
In comparison with other companies in the American Biotechs industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was CHF2.8m. From this we gather that Andrea Pfeifer is paid around the median for CEOs in the industry. What's more, Andrea Pfeifer holds US$10m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CHF578k | CHF558k | 22% |
Other | CHF2.1m | CHF1.0m | 78% |
Total Compensation | CHF2.7m | CHF1.6m | 100% |
On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. Although there is a difference in how total compensation is set, AC Immune more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
AC Immune SA's Growth
Over the past three years, AC Immune SA has seen its earnings per share (EPS) grow by 15% per year. In the last year, its revenue is up 276%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has AC Immune SA Been A Good Investment?
The return of -46% over three years would not have pleased AC Immune SA shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for AC Immune (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.
Important note: AC Immune is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
