Should You Worry About Newron Pharmaceuticals S.p.A.'s (VTX:NWRN) CEO Pay Cheque?
In 2012 Stefan Weber was appointed CEO of Newron Pharmaceuticals S.p.A. (VTX:NWRN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
View our latest analysis for Newron Pharmaceuticals
How Does Stefan Weber's Compensation Compare With Similar Sized Companies?
Our data indicates that Newron Pharmaceuticals S.p.A. is worth CHF144m, and total annual CEO compensation is €647k. (This figure is for the year to December 2018). That's a notable increase of 15% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €430k. We looked at a group of companies with market capitalizations under €179m, and the median CEO total compensation was €456k.
As you can see, Stefan Weber is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Newron Pharmaceuticals S.p.A. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Newron Pharmaceuticals has changed over time.
Is Newron Pharmaceuticals S.p.A. Growing?
On average over the last three years, Newron Pharmaceuticals S.p.A. has grown earnings per share (EPS) by 40% each year (using a line of best fit). Its revenue is down -70% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.
Has Newron Pharmaceuticals S.p.A. Been A Good Investment?
Since shareholders would have lost about 52% over three years, some Newron Pharmaceuticals S.p.A. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We compared total CEO remuneration at Newron Pharmaceuticals S.p.A. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. So shareholders might not feel great about the fact that CEO pay increased on last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying Newron Pharmaceuticals shares with their own money (free access).
If you want to buy a stock that is better than Newron Pharmaceuticals, this free list of high return, low debt companies is a great place to look.
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.
