Shareholders May Be More Conservative With Amplifon S.p.A.'s (BIT:AMP) CEO Compensation For Now

Key Insights

• Amplifon's Annual General Meeting to take place on 24th of April
• CEO Enrico Vita's total compensation includes salary of €1.51m
• The total compensation is 90% higher than the average for the industry
• Amplifon's three-year loss to shareholders was 10% while its EPS grew by 17% over the past three years

In the past three years, the share price of Amplifon S.p.A. (BIT:AMP) has struggled to generate growth for its shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 24th of April. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Amplifon

How Does Total Compensation For Enrico Vita Compare With Other Companies In The Industry?

At the time of writing, our data shows that Amplifon S.p.A. has a market capitalization of €7.0b, and reported total annual CEO compensation of €6.8m for the year to December 2023. That's a slight decrease of 5.8% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.5m.

In comparison with other companies in the Italy Healthcare industry with market capitalizations ranging from €3.7b to €11b, the reported median CEO total compensation was €3.6m. Hence, we can conclude that Enrico Vita is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	€1.5m	€1.5m	22%
Other	€5.3m	€5.7m	78%
Total Compensation	€6.8m	€7.2m	100%

On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. It's interesting to note that Amplifon allocates a smaller portion of compensation to salary 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 Amplifon S.p.A.'s Growth Numbers

Amplifon S.p.A.'s earnings per share (EPS) grew 17% per year over the last three years. Its revenue is up 6.7% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. 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 Amplifon S.p.A. Been A Good Investment?

Given the total shareholder loss of 10% over three years, many shareholders in Amplifon S.p.A. 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. 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. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Amplifon that investors should look into moving forward.

Important note: Amplifon 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.