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Is Bavarian Nordic A/S (CPH:BAVA) Excessively Paying Its CEO?

Simply Wall St

Paul Chaplin became the CEO of Bavarian Nordic A/S (CPH:BAVA) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Bavarian Nordic

How Does Paul Chaplin's Compensation Compare With Similar Sized Companies?

Our data indicates that Bavarian Nordic A/S is worth ø5.1b, and total annual CEO compensation was reported as ø8.3m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at ø5.7m. We examined companies with market caps from ø2.7b to ø11b, and discovered that the median CEO total compensation of that group was ø7.6m.

So Paul Chaplin is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

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

CPSE:BAVA CEO Compensation, October 31st 2019

Is Bavarian Nordic A/S Growing?

Over the last three years Bavarian Nordic A/S has shrunk its earnings per share by an average of 59% per year (measured with a line of best fit). It saw its revenue drop 28% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Bavarian Nordic A/S Been A Good Investment?

Given the total loss of 30% over three years, many shareholders in Bavarian Nordic A/S are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Remuneration for Paul Chaplin is close enough to the median pay for a CEO of a similar sized company .

After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Suffice it to say, we don't think the CEO is underpaid! So you may want to check if insiders are buying Bavarian Nordic shares with their own money (free access).

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

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.