Here's Why Shareholders May Want To Be Cautious With Increasing Bavarian Nordic A/S' (CPH:BAVA) CEO Pay Packet

Key Insights

• Bavarian Nordic's Annual General Meeting to take place on 9th of April
• Total pay for CEO Paul Chaplin includes kr.8.21m salary
• Total compensation is 180% above industry average
• Bavarian Nordic's EPS grew by 90% over the past three years while total shareholder loss over the past three years was 13%

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As many shareholders of Bavarian Nordic A/S (CPH:BAVA) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 9th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Bavarian Nordic

Comparing Bavarian Nordic A/S' CEO Compensation With The Industry

At the time of writing, our data shows that Bavarian Nordic A/S has a market capitalization of kr.12b, and reported total annual CEO compensation of kr.34m for the year to December 2024. Notably, that's an increase of 46% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at kr.8.2m.

For comparison, other companies in the Denmark Biotechs industry with market capitalizations ranging between kr.6.9b and kr.22b had a median total CEO compensation of kr.12m. Hence, we can conclude that Paul Chaplin is remunerated higher than the industry median. Furthermore, Paul Chaplin directly owns kr.15m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	kr.8.2m	kr.7.2m	24%
Other	kr.26m	kr.16m	76%
Total Compensation	kr.34m	kr.23m	100%

On an industry level, around 21% of total compensation represents salary and 79% is other remuneration. Bavarian Nordic is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Bavarian Nordic A/S' Growth

Bavarian Nordic A/S's earnings per share (EPS) grew 90% per year over the last three years. Its revenue is down 19% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Bavarian Nordic A/S Been A Good Investment?

Given the total shareholder loss of 13% over three years, many shareholders in Bavarian Nordic A/S are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At 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 will likely improve performance in the future.

Shareholders may want to check for free if Bavarian Nordic insiders are buying or selling shares.

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.