Is Affimed N.V.’s (NASDAQ:AFMD) CEO Overpaid Relative To Its Peers?

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In 2011 Adi Hoess was appointed CEO of Affimed N.V. (NASDAQ:AFMD). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Affimed

How Does Adi Hoess’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Affimed N.V. has a market cap of US$177m, and is paying total annual CEO compensation of €1.4m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at €462k. We looked at a group of companies with market capitalizations from €89m to €356m, and the median CEO total compensation was €1.0m.

It would therefore appear that Affimed N.V. pays Adi Hoess more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Affimed has changed from year to year.

NasdaqGM:AFMD CEO Compensation, July 11th 2019
NasdaqGM:AFMD CEO Compensation, July 11th 2019

Is Affimed N.V. Growing?

Over the last three years Affimed N.V. has grown its earnings per share (EPS) by an average of 33% per year (using a line of best fit). In the last year, its revenue is up 1373%.

This demonstrates that the company has been improving recently. A good result. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.

Has Affimed N.V. Been A Good Investment?

With a total shareholder return of 4.4% over three years, Affimed N.V. has done okay by shareholders. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

We compared total CEO remuneration at Affimed N.V. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don’t see a problem with the CEO pay, given the good EPS growth. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Affimed (free visualization of insider trades).

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.