Shareholders May Be Wary Of Increasing Alfen N.V.'s (AMS:ALFEN) CEO Compensation Package

Key Insights

• Alfen will host its Annual General Meeting on 8th of April
• CEO Marco Roeleveld's total compensation includes salary of €475.0k
• Total compensation is similar to the industry average
• Alfen's EPS declined by 52% over the past three years while total shareholder loss over the past three years was 87%

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The results at Alfen N.V. (AMS:ALFEN) have been quite disappointing recently and CEO Marco Roeleveld bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 8th of April. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Alfen

Comparing Alfen N.V.'s CEO Compensation With The Industry

According to our data, Alfen N.V. has a market capitalization of €267m, and paid its CEO total annual compensation worth €567k over the year to December 2024. We note that's a decrease of 13% compared to last year. In particular, the salary of €475.0k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the the Netherlands Electrical industry with market capitalizations between €93m and €371m, we discovered that the median CEO total compensation of that group was €704k. So it looks like Alfen compensates Marco Roeleveld in line with the median for the industry. Moreover, Marco Roeleveld also holds €1.3m worth of Alfen stock directly under their own name.

On an industry level, around 52% of total compensation represents salary and 48% is other remuneration. Alfen pays out 84% of remuneration in the form of a salary, significantly higher than the industry average. 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 Alfen N.V.'s Growth Numbers

Alfen N.V. has reduced its earnings per share by 52% a year over the last three years. In the last year, its revenue is down 3.3%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Alfen N.V. Been A Good Investment?

The return of -87% over three years would not have pleased Alfen N.V. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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. That's why we did some digging and identified 1 warning sign for Alfen that investors should think about before committing capital to this stock.

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.