AMG Critical Materials N.V.'s (AMS:AMG) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• AMG Critical Materials' Annual General Meeting to take place on 8th of May
• CEO Heinz Schimmelbusch's total compensation includes salary of US$1.26m
• Total compensation is 363% above industry average
• Over the past three years, AMG Critical Materials' EPS grew by 89% and over the past three years, the total loss to shareholders 30%

Shareholders of AMG Critical Materials N.V. (AMS:AMG) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 8th 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.

See our latest analysis for AMG Critical Materials

Comparing AMG Critical Materials N.V.'s CEO Compensation With The Industry

At the time of writing, our data shows that AMG Critical Materials N.V. has a market capitalization of €712m, and reported total annual CEO compensation of US$5.3m for the year to December 2023. That's a modest increase of 3.1% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.

In comparison with other companies in the the Netherlands Metals and Mining industry with market capitalizations ranging from €375m to €1.5b, the reported median CEO total compensation was US$1.1m. Accordingly, our analysis reveals that AMG Critical Materials N.V. pays Heinz Schimmelbusch north of the industry median. Moreover, Heinz Schimmelbusch also holds €28m worth of AMG Critical Materials stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.3m	US$1.0m	24%
Other	US$4.0m	US$4.1m	76%
Total Compensation	US$5.3m	US$5.1m	100%

Talking in terms of the industry, salary represented approximately 62% of total compensation out of all the companies we analyzed, while other remuneration made up 38% of the pie. AMG Critical Materials sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at AMG Critical Materials N.V.'s Growth Numbers

AMG Critical Materials N.V.'s earnings per share (EPS) grew 89% per year over the last three years. It saw its revenue drop 1.0% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 AMG Critical Materials N.V. Been A Good Investment?

With a three year total loss of 30% for the shareholders, AMG Critical Materials N.V. would certainly have some dissatisfied shareholders. 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. 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.

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 4 warning signs for AMG Critical Materials that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.