Stock Analysis

Here's What We Learned About The CEO Pay At AMG Advanced Metallurgical Group N.V. (AMS:AMG)

  •  Updated
ENXTAM:AMG
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This article will reflect on the compensation paid to Heinz Schimmelbusch who has served as CEO of AMG Advanced Metallurgical Group N.V. (AMS:AMG) since 2006. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for AMG Advanced Metallurgical Group

How Does Total Compensation For Heinz Schimmelbusch Compare With Other Companies In The Industry?

According to our data, AMG Advanced Metallurgical Group N.V. has a market capitalization of €649m, and paid its CEO total annual compensation worth US$4.2m over the year to December 2019. We note that's a decrease of 38% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.

On examining similar-sized companies in the industry with market capitalizations between €336m and €1.3b, we discovered that the median CEO total compensation of that group was US$1.2m. Hence, we can conclude that Heinz Schimmelbusch is remunerated higher than the industry median. Moreover, Heinz Schimmelbusch also holds €23m worth of AMG Advanced Metallurgical Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20192018Proportion (2019)
Salary US$1.0m US$1.0m 25%
Other US$3.2m US$5.7m 75%
Total CompensationUS$4.2m US$6.8m100%

Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. AMG Advanced Metallurgical Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ENXTAM:AMG CEO Compensation November 27th 2020

AMG Advanced Metallurgical Group N.V.'s Growth

Over the last three years, AMG Advanced Metallurgical Group N.V. has shrunk its earnings per share by 86% per year. In the last year, its revenue is down 25%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 AMG Advanced Metallurgical Group N.V. Been A Good Investment?

Since shareholders would have lost about 36% over three years, some AMG Advanced Metallurgical Group N.V. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, AMG Advanced Metallurgical Group N.V. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

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 AMG Advanced Metallurgical Group we think you should know about.

Important note: AMG Advanced Metallurgical Group 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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