We Discuss Why Affimed N.V.'s (NASDAQ:AFMD) CEO May Deserve A Higher Pay Packet

Simply Wall St
June 08, 2021
Source: Shutterstock

Shareholders will probably not be disappointed by the robust results at Affimed N.V. (NASDAQ:AFMD) recently and they will be keeping this in mind as they go into the AGM on 15 June 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

View our latest analysis for Affimed

Comparing Affimed N.V.'s CEO Compensation With the industry

According to our data, Affimed N.V. has a market capitalization of US$1.0b, and paid its CEO total annual compensation worth €1.4m over the year to December 2020. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €493k.

On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was €2.7m. Accordingly, Affimed pays its CEO under the industry median.

Component20202019Proportion (2020)
Salary €493k €474k 36%
Other €862k €842k 64%
Total Compensation€1.4m €1.3m100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. Affimed is paying a higher share of its remuneration through a 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.

NasdaqGM:AFMD CEO Compensation June 8th 2021

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

Affimed N.V. has seen its earnings per share (EPS) increase by 6.3% a year over the past three years. Its revenue is up 35% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. 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 Affimed N.V. Been A Good Investment?

Boasting a total shareholder return of 284% over three years, Affimed N.V. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Affimed we think you should know about.

Important note: Affimed 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.

If you decide to trade Affimed, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.