This Is Why Shareholders May Want To Hold Back On A Pay Rise For Medigene AG's (ETR:MDG1) CEO

The underwhelming performance at Medigene AG (ETR:MDG1) recently has probably not pleased shareholders. The next AGM coming up on 24 June 2021 will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

See our latest analysis for Medigene

How Does Total Compensation For Dolores Schendel Compare With Other Companies In The Industry?

According to our data, Medigene AG has a market capitalization of €101m, and paid its CEO total annual compensation worth €395k over the year to December 2020. That's a notable decrease of 19% on last year. We note that the salary portion, which stands at €320.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below €165m, reported a median total CEO compensation of €649k. That is to say, Dolores Schendel is paid under the industry median.

Component	2020	2019	Proportion (2020)
Salary	€320k	€350k	81%
Other	€75k	€137k	19%
Total Compensation	€395k	€487k	100%

Talking in terms of the industry, salary represented approximately 46% of total compensation out of all the companies we analyzed, while other remuneration made up 54% of the pie. According to our research, Medigene has allocated a higher percentage of pay to salary in comparison to the wider 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 Medigene AG's Growth Numbers

Over the last three years, Medigene AG has shrunk its earnings per share by 12% per year. Its revenue is down 24% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Medigene AG Been A Good Investment?

The return of -67% over three years would not have pleased Medigene AG shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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. We did our research and spotted 1 warning sign for Medigene that investors should look into moving forward.

Important note: Medigene 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.

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