Shareholders Will Probably Hold Off On Increasing AC Immune SA's (NASDAQ:ACIU) CEO Compensation For The Time Being

Key Insights

• AC Immune will host its Annual General Meeting on 20th of June
• CEO Andrea Pfeifer's total compensation includes salary of CHF578.0k
• The overall pay is comparable to the industry average
• Over the past three years, AC Immune's EPS grew by 15% and over the past three years, the total loss to shareholders 46%

The underwhelming share price performance of AC Immune SA (NASDAQ:ACIU) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 20th of June could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for AC Immune

Comparing AC Immune SA's CEO Compensation With The Industry

Our data indicates that AC Immune SA has a market capitalization of US$444m, and total annual CEO compensation was reported as CHF2.7m for the year to December 2023. We note that's an increase of 69% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CHF578k.

For comparison, other companies in the American Biotechs industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of CHF2.8m. From this we gather that Andrea Pfeifer is paid around the median for CEOs in the industry. Furthermore, Andrea Pfeifer directly owns US$10m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CHF578k	CHF558k	22%
Other	CHF2.1m	CHF1.0m	78%
Total Compensation	CHF2.7m	CHF1.6m	100%

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. Although there is a difference in how total compensation is set, AC Immune more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at AC Immune SA's Growth Numbers

AC Immune SA's earnings per share (EPS) grew 15% per year over the last three years. In the last year, its revenue is up 276%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has AC Immune SA Been A Good Investment?

Few AC Immune SA shareholders would feel satisfied with the return of -46% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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 probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in AC Immune we think you should know about.

Important note: AC Immune 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com