We Think Shareholders May Want To Consider A Review Of AFT Pharmaceuticals Limited's (NZSE:AFT) CEO Compensation Package

Key Insights

• AFT Pharmaceuticals to hold its Annual General Meeting on 1st of August
• Total pay for CEO Hartley Atkinson includes NZ$730.3k salary
• The total compensation is similar to the average for the industry
• Over the past three years, AFT Pharmaceuticals' EPS fell by 16% and over the past three years, the total loss to shareholders 26%

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The results at AFT Pharmaceuticals Limited (NZSE:AFT) have been quite disappointing recently and CEO Hartley Atkinson bears some responsibility for this. At the upcoming AGM on 1st of August, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for AFT Pharmaceuticals

How Does Total Compensation For Hartley Atkinson Compare With Other Companies In The Industry?

At the time of writing, our data shows that AFT Pharmaceuticals Limited has a market capitalization of NZ$282m, and reported total annual CEO compensation of NZ$1.1m for the year to March 2025. That's a notable increase of 9.9% on last year. We note that the salary portion, which stands at NZ$730.3k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the New Zealand Pharmaceuticals industry with market capitalizations between NZ$166m and NZ$665m, we discovered that the median CEO total compensation of that group was NZ$879k. From this we gather that Hartley Atkinson is paid around the median for CEOs in the industry. Furthermore, Hartley Atkinson directly owns NZ$194m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. AFT Pharmaceuticals is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

AFT Pharmaceuticals Limited's Growth

Over the last three years, AFT Pharmaceuticals Limited has shrunk its earnings per share by 16% per year. In the last year, its revenue is up 6.5%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 AFT Pharmaceuticals Limited Been A Good Investment?

Since shareholders would have lost about 26% over three years, some AFT Pharmaceuticals Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at AFT Pharmaceuticals.

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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.