Key Insights

• Avantium will host its Annual General Meeting on 15th of May

• CEO Tom van Aken's total compensation includes salary of €300.0k

• The overall pay is comparable to the industry average

• Over the past three years, Avantium's EPS grew by 7.2% and over the past three years, the total loss to shareholders 26%

In the past three years, the share price of Avantium N.V. (AMS:AVTX) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Avantium

Comparing Avantium N.V.'s CEO Compensation With The Industry

At the time of writing, our data shows that Avantium N.V. has a market capitalization of €211m, and reported total annual CEO compensation of €615k for the year to December 2023. We note that's an increase of 11% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €300k.

On examining similar-sized companies in the Dutch Professional Services industry with market capitalizations between €93m and €372m, we discovered that the median CEO total compensation of that group was €479k. From this we gather that Tom van Aken is paid around the median for CEOs in the industry. Furthermore, Tom van Aken directly owns €481k worth of shares in the company.

Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. Although there is a difference in how total compensation is set, Avantium more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

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

Avantium N.V. has seen its earnings per share (EPS) increase by 7.2% a year over the past three years. It achieved revenue growth of 11% over the last year.

This revenue growth could really point to a brighter future. And the improvement in EPSis modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. 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 Avantium N.V. Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in Avantium N.V. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 is a bit concerning) in Avantium we think you should know about.

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

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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.