Increases to CEO Compensation Might Be Put On Hold For Now at Nedap N.V. (AMS:NEDAP)

Key Insights

• Nedap to hold its Annual General Meeting on 17th of April
• Total pay for CEO Ruben Wegman includes €473.0k salary
• The total compensation is 56% higher than the average for the industry
• Over the past three years, Nedap's EPS fell by 0.1% and over the past three years, the total shareholder return was 6.3%

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The share price of Nedap N.V. (AMS:NEDAP) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. The upcoming AGM on 17th of April may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Nedap

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

Our data indicates that Nedap N.V. has a market capitalization of €407m, and total annual CEO compensation was reported as €913k for the year to December 2024. That is, the compensation was roughly the same as last year. Notably, the salary which is €473.0k, represents a considerable chunk of the total compensation being paid.

On examining similar-sized companies in the the Netherlands Electronic industry with market capitalizations between €179m and €715m, we discovered that the median CEO total compensation of that group was €587k. Accordingly, our analysis reveals that Nedap N.V. pays Ruben Wegman north of the industry median. Furthermore, Ruben Wegman directly owns €3.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. Nedap sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Nedap N.V.'s Growth Numbers

Over the last three years, Nedap N.V. has not seen its earnings per share change much, though they have deteriorated slightly. It saw its revenue drop 4.1% over the last year.

Its a bit disappointing to see that the company has failed to grow its EPS. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings. .

Has Nedap N.V. Been A Good Investment?

Nedap N.V. has generated a total shareholder return of 6.3% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 Nedap that you should be aware of before investing.

Switching gears from Nedap, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.