We Think Some Shareholders May Hesitate To Increase Aelis Farma SA's (EPA:AELIS) CEO Compensation

Key Insights

• Aelis Farma will host its Annual General Meeting on 27th of May
• Salary of €300.0k is part of CEO Pier Piazza's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Aelis Farma's EPS grew by 14% and over the past three years, the total loss to shareholders 90%

Our free stock report includes 2 warning signs investors should be aware of before investing in Aelis Farma. Read for free now.

The underwhelming share price performance of Aelis Farma SA (EPA:AELIS) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 27th of May. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Aelis Farma

How Does Total Compensation For Pier Piazza Compare With Other Companies In The Industry?

According to our data, Aelis Farma SA has a market capitalization of €17m, and paid its CEO total annual compensation worth €459k over the year to December 2024. We note that's a small decrease of 3.2% on last year. Notably, the salary which is €300.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the French Biotechs industry with market capitalizations below €177m, we found that the median total CEO compensation was €449k. From this we gather that Pier Piazza is paid around the median for CEOs in the industry. What's more, Pier Piazza holds €3.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	€300k	€300k	65%
Other	€159k	€174k	35%
Total Compensation	€459k	€474k	100%

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. According to our research, Aelis Farma 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 Aelis Farma SA's Growth Numbers

Aelis Farma SA has seen its earnings per share (EPS) increase by 14% a year over the past three years. In the last year, its revenue is down 55%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Aelis Farma SA Been A Good Investment?

With a total shareholder return of -90% over three years, Aelis Farma SA shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which makes us a bit uncomfortable) in Aelis Farma we think you should know about.

Important note: Aelis Farma 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.