We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Axway Software SA's (EPA:AXW) CEO For Now

Key Insights

• Axway Software to hold its Annual General Meeting on 16th of May
• Total pay for CEO Patrick Donovan includes €578.0k salary
• The overall pay is 185% above the industry average
• Axway Software's EPS grew by 63% over the past three years while total shareholder loss over the past three years was 11%

As many shareholders of Axway Software SA (EPA:AXW) 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 16th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 Axway Software

How Does Total Compensation For Patrick Donovan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Axway Software SA has a market capitalization of €517m, and reported total annual CEO compensation of €2.0m for the year to December 2023. Notably, that's an increase of 11% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €578k.

For comparison, other companies in the French Software industry with market capitalizations ranging between €185m and €742m had a median total CEO compensation of €719k. Hence, we can conclude that Patrick Donovan is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	€578k	€522k	28%
Other	€1.5m	€1.3m	72%
Total Compensation	€2.0m	€1.8m	100%

Speaking on an industry level, nearly 42% of total compensation represents salary, while the remainder of 58% is other remuneration. In Axway Software's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Axway Software SA's Growth Numbers

Axway Software SA's earnings per share (EPS) grew 63% per year over the last three years. It achieved revenue growth of 1.6% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Axway Software SA Been A Good Investment?

Since shareholders would have lost about 11% over three years, some Axway Software SA investors would surely be feeling negative emotions. 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. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with 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. That's why we did some digging and identified 1 warning sign for Axway Software that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.