Here's Why We Think Newron Pharmaceuticals S.p.A.'s (VTX:NWRN) CEO Compensation Looks Fair for the time being

Key Insights

• Newron Pharmaceuticals will host its Annual General Meeting on 17th of April
• Total pay for CEO Stefan Weber includes €475.0k salary
• Total compensation is similar to the industry average
• Newron Pharmaceuticals' EPS grew by 7.8% over the past three years while total shareholder return over the past three years was 192%

Performance at Newron Pharmaceuticals S.p.A. (VTX:NWRN) has been reasonably good and CEO Stefan Weber has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 17th of April. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Newron Pharmaceuticals

Comparing Newron Pharmaceuticals S.p.A.'s CEO Compensation With The Industry

At the time of writing, our data shows that Newron Pharmaceuticals S.p.A. has a market capitalization of CHF141m, and reported total annual CEO compensation of €510k for the year to December 2023. That's mostly flat as compared to the prior year's compensation. In particular, the salary of €475.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Swiss Pharmaceuticals industry with market caps ranging from CHF91m to CHF365m, we found that the median CEO total compensation was €470k. So it looks like Newron Pharmaceuticals compensates Stefan Weber in line with the median for the industry. What's more, Stefan Weber holds CHF154k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	€475k	€429k	93%
Other	€35k	€69k	7%
Total Compensation	€510k	€498k	100%

Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. Newron Pharmaceuticals is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Newron Pharmaceuticals S.p.A.'s Growth Numbers

Newron Pharmaceuticals S.p.A. has seen its earnings per share (EPS) increase by 7.8% a year over the past three years. Its revenue is up 49% over the last year.

We like the look of the strong year-on-year improvement in revenue. With that in mind, the modestly improving EPS seems positive. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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 Newron Pharmaceuticals S.p.A. Been A Good Investment?

We think that the total shareholder return of 192%, over three years, would leave most Newron Pharmaceuticals S.p.A. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Newron Pharmaceuticals (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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.