Most Shareholders Will Probably Find That The CEO Compensation For Zealand Pharma A/S (CPH:ZEAL) Is Reasonable

Key Insights

• Zealand Pharma to hold its Annual General Meeting on 27th of March
• CEO Adam Steensberg's total compensation includes salary of kr.9.00m
• Total compensation is similar to the industry average
• Over the past three years, Zealand Pharma's EPS grew by 9.5% and over the past three years, the total shareholder return was 516%

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Under the guidance of CEO Adam Steensberg, Zealand Pharma A/S (CPH:ZEAL) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27th of March. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Zealand Pharma

How Does Total Compensation For Adam Steensberg Compare With Other Companies In The Industry?

At the time of writing, our data shows that Zealand Pharma A/S has a market capitalization of kr.40b, and reported total annual CEO compensation of kr.42m for the year to December 2024. That's a notable increase of 70% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at kr.9.0m.

On examining similar-sized companies in the Denmark Biotechs industry with market capitalizations between kr.27b and kr.82b, we discovered that the median CEO total compensation of that group was kr.41m. From this we gather that Adam Steensberg is paid around the median for CEOs in the industry. What's more, Adam Steensberg holds kr.19m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. In Zealand Pharma's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Zealand Pharma A/S' Growth

Zealand Pharma A/S has seen its earnings per share (EPS) increase by 9.5% a year over the past three years. Its revenue is down 82% over the previous year.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Zealand Pharma A/S Been A Good Investment?

Most shareholders would probably be pleased with Zealand Pharma A/S for providing a total return of 516% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Zealand Pharma that you should be aware of before investing.

Important note: Zealand Pharma 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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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.