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Is Affimed N.V.'s (NASDAQ:AFMD) CEO Salary Justified?

Simply Wall St

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Adi Hoess became the CEO of Affimed N.V. (NASDAQ:AFMD) in 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See 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$190m, and is paying total annual CEO compensation of €1.4m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at €462k. When we examined a selection of companies with market caps ranging from €89m to €356m, we found 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. We can better assess whether the pay is overly generous by looking into the underlying business performance.

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

NasdaqGM:AFMD CEO Compensation, July 18th 2019

Is Affimed N.V. Growing?

On average over the last three years, Affimed N.V. has grown earnings per share (EPS) by 33% each 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. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Affimed N.V. Been A Good Investment?

With a total shareholder return of 9.0% over three years, Affimed N.V. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We examined the amount Affimed N.V. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Affimed.

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.

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.