Increases to CEO Compensation Might Be Put On Hold For Now at Addex Therapeutics Ltd (VTX:ADXN)

In the past three years, the share price of Addex Therapeutics Ltd (VTX:ADXN) has struggled to grow and now shareholders are sitting on a loss. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 16 June 2021, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Addex Therapeutics

How Does Total Compensation For Tim Dyer Compare With Other Companies In The Industry?

According to our data, Addex Therapeutics Ltd has a market capitalization of CHF68m, and paid its CEO total annual compensation worth CHF917k over the year to December 2020. Notably, that's an increase of 29% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CHF454k.

For comparison, other companies in the industry with market capitalizations below CHF179m, reported a median total CEO compensation of CHF415k. Accordingly, our analysis reveals that Addex Therapeutics Ltd pays Tim Dyer north of the industry median. What's more, Tim Dyer holds CHF679k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	CHF454k	CHF429k	50%
Other	CHF463k	CHF280k	50%
Total Compensation	CHF917k	CHF709k	100%

On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. Addex Therapeutics pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Addex Therapeutics Ltd's Growth

Over the last three years, Addex Therapeutics Ltd has shrunk its earnings per share by 56% per year. Its revenue is up 25% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Addex Therapeutics Ltd Been A Good Investment?

With a total shareholder return of -47% over three years, Addex Therapeutics Ltd shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Addex Therapeutics (2 are significant!) that you should be aware of before investing here.

Switching gears from Addex Therapeutics, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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. 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.
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