Here's Why Bachem Holding AG's (VTX:BANB) CEO Compensation Is The Least Of Shareholders Concerns

Key Insights

• Bachem Holding will host its Annual General Meeting on 24th of April
• Salary of CHF308.0k is part of CEO Thomas Meier's total remuneration
• The overall pay is 74% below the industry average
• Bachem Holding's three-year loss to shareholders was 10% while its EPS grew by 10% over the past three years

Shareholders may be wondering what CEO Thomas Meier plans to do to improve the less than great performance at Bachem Holding AG (VTX:BANB) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 24th of April. 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. We think CEO compensation looks appropriate given the data we have put together.

Check out our latest analysis for Bachem Holding

How Does Total Compensation For Thomas Meier Compare With Other Companies In The Industry?

Our data indicates that Bachem Holding AG has a market capitalization of CHF6.0b, and total annual CEO compensation was reported as CHF752k for the year to December 2023. We note that's an increase of 25% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CHF308k.

On comparing similar companies from the Swiss Life Sciences industry with market caps ranging from CHF3.6b to CHF11b, we found that the median CEO total compensation was CHF2.8m. In other words, Bachem Holding pays its CEO lower than the industry median. Moreover, Thomas Meier also holds CHF1.3m worth of Bachem Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CHF308k	CHF298k	41%
Other	CHF444k	CHF306k	59%
Total Compensation	CHF752k	CHF604k	100%

Speaking on an industry level, nearly 35% of total compensation represents salary, while the remainder of 65% is other remuneration. It's interesting to note that Bachem Holding pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Bachem Holding AG's Growth Numbers

Over the past three years, Bachem Holding AG has seen its earnings per share (EPS) grow by 10% per year. In the last year, its revenue is up 8.6%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Bachem Holding AG Been A Good Investment?

With a three year total loss of 10% for the shareholders, Bachem Holding AG would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The uninspiring share price returns contrasts with the strong EPS growth, suggesting that there may be other factors at play causing it to diverge from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Bachem Holding that you should be aware of before investing.

Important note: Bachem Holding 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.