Shareholders Will Probably Not Have Any Issues With NewAmsterdam Pharma Company N.V.'s (NASDAQ:NAMS) CEO Compensation

Key Insights

• NewAmsterdam Pharma's Annual General Meeting to take place on 4th of June
• Total pay for CEO Michael Davidson includes US$621.3k salary
• The total compensation is similar to the average for the industry
• NewAmsterdam Pharma's total shareholder return over the past three years was 76% while its EPS was down 44% over the past three years

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Under the guidance of CEO Michael Davidson, NewAmsterdam Pharma Company N.V. (NASDAQ:NAMS) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 4th of June. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for NewAmsterdam Pharma

Comparing NewAmsterdam Pharma Company N.V.'s CEO Compensation With The Industry

At the time of writing, our data shows that NewAmsterdam Pharma Company N.V. has a market capitalization of US$1.9b, and reported total annual CEO compensation of US$6.5m for the year to December 2024. That's a notable increase of 11% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$621k.

On examining similar-sized companies in the American Biotechs industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$7.7m. This suggests that NewAmsterdam Pharma remunerates its CEO largely in line with the industry average. Moreover, Michael Davidson also holds US$26m worth of NewAmsterdam Pharma stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. NewAmsterdam Pharma sets aside a smaller share of compensation for 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.

A Look at NewAmsterdam Pharma Company N.V.'s Growth Numbers

Over the last three years, NewAmsterdam Pharma Company N.V. has shrunk its earnings per share by 44% per year. It achieved revenue growth of 587% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has NewAmsterdam Pharma Company N.V. Been A Good Investment?

We think that the total shareholder return of 76%, over three years, would leave most NewAmsterdam Pharma Company N.V. shareholders smiling. 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...

The overall company performance has been commendable, however there are still areas for improvement. We reckon that there are some shareholders who may be hesitant to increase CEO pay further until EPS growth starts to improve, despite the robust revenue growth.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for NewAmsterdam Pharma that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.