We Think The Compensation For Galenica AG's (VTX:GALE) CEO Looks About Right

Key Insights

• Galenica to hold its Annual General Meeting on 10th of April
• CEO Marc Werner's total compensation includes salary of CHF500.0k
• The total compensation is 31% less than the average for the industry
• Galenica's EPS declined by 1.7% over the past three years while total shareholder return over the past three years was 34%

The performance at Galenica AG (VTX:GALE) has been rather lacklustre of late and shareholders may be wondering what CEO Marc Werner is planning to do about this. At the next AGM coming up on 10th of April, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Galenica

Comparing Galenica AG's CEO Compensation With The Industry

At the time of writing, our data shows that Galenica AG has a market capitalization of CHF3.7b, and reported total annual CEO compensation of CHF1.1m for the year to December 2023. Notably, that's a decrease of 27% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at CHF500k.

For comparison, other companies in the Switzerland Healthcare industry with market capitalizations ranging between CHF1.8b and CHF5.8b had a median total CEO compensation of CHF1.5m. In other words, Galenica pays its CEO lower than the industry median.

Component	2023	2022	Proportion (2023)
Salary	CHF500k	CHF500k	48%
Other	CHF550k	CHF941k	52%
Total Compensation	CHF1.1m	CHF1.4m	100%

On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. It's interesting to note that Galenica allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Galenica AG's Growth Numbers

Over the last three years, Galenica AG has shrunk its earnings per share by 1.7% per year. It achieved revenue growth of 4.5% over the last year.

The lack of EPS growth is certainly uninspiring. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Galenica AG Been A Good Investment?

Boasting a total shareholder return of 34% over three years, Galenica AG has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Galenica that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.