Is argenx SE's (EBR:ARGX) CEO Paid Enough Relative To Peers?
Tim Van Hauwermeiren has been the CEO of argenx SE (EBR:ARGX) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
View our latest analysis for argenx
How Does Tim Van Hauwermeiren's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that argenx SE has a market cap of €4.5b, and is paying total annual CEO compensation of €4.4m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at €500k. We looked at a group of companies with market capitalizations from €3.6b to €11b, and the median CEO total compensation was €941k.
Thus we can conclude that Tim Van Hauwermeiren receives more in total compensation than the median of a group of companies in the same market, and of similar size to argenx SE. However, this doesn't necessarily mean the pay 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.
You can see, below, how CEO compensation at argenx has changed over time.
Is argenx SE Growing?
Over the last three years argenx SE has shrunk its earnings per share by an average of 26% per year (measured with a line of best fit). It achieved revenue growth of 59% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has argenx SE Been A Good Investment?
Most shareholders would probably be pleased with argenx SE for providing a total return of 775% over three years. 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.
In Summary...
We examined the amount argenx SE pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling argenx (free visualization of insider trades).
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.
