We Think Genmab A/S' (CPH:GMAB) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Genmab will host its Annual General Meeting on 13th of March
• Salary of kr.9.20m is part of CEO Jan G.J. van Winkel's total remuneration
• The total compensation is similar to the average for the industry
• Genmab's EPS declined by 3.0% over the past three years while total shareholder loss over the past three years was 1.2%

The results at Genmab A/S (CPH:GMAB) have been quite disappointing recently and CEO Jan G.J. van Winkel bears some responsibility for this. At the upcoming AGM on 13th of March, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Genmab

How Does Total Compensation For Jan G.J. van Winkel Compare With Other Companies In The Industry?

At the time of writing, our data shows that Genmab A/S has a market capitalization of kr.130b, and reported total annual CEO compensation of kr.44m for the year to December 2023. That's a modest increase of 6.2% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at kr.9.2m.

For comparison, other companies in the Denmark Biotechs industry with market capitalizations above kr.55b, reported a median total CEO compensation of kr.55m. This suggests that Genmab remunerates its CEO largely in line with the industry average. What's more, Jan G.J. van Winkel holds kr.1.2b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	kr.9.2m	kr.8.6m	21%
Other	kr.35m	kr.33m	79%
Total Compensation	kr.44m	kr.42m	100%

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. It's interesting to note that Genmab allocates a smaller portion of compensation to salary in comparison 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.

Genmab A/S' Growth

Over the last three years, Genmab A/S has shrunk its earnings per share by 3.0% per year. In the last year, its revenue is up 14%.

Its a bit disappointing to see that the company has failed to grow its EPS. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Genmab A/S Been A Good Investment?

Given the total shareholder loss of 1.2% over three years, many shareholders in Genmab A/S are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Genmab that investors should look into moving forward.

Switching gears from Genmab, 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. 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.