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Is Bavarian Nordic A/S's (CPH:BAVA) CEO Salary Justified?

Simply Wall St

Paul Chaplin has been the CEO of Bavarian Nordic A/S (CPH:BAVA) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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 Bavarian Nordic

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

According to our data, Bavarian Nordic A/S has a market capitalization of ø12b, and paid its CEO total annual compensation worth ø8.3m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at ø5.7m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ø6.8b to ø22b. The median total CEO compensation was ø11m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Bavarian Nordic stands. On an industry level, roughly 56% of total compensation represents salary and 44% is other remuneration. So it seems like there isn't a significant difference between Bavarian Nordic and the broader market, in terms of salary allocation in the overall compensation package.

So Paul Chaplin receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see, below, how CEO compensation at Bavarian Nordic has changed over time.

CPSE:BAVA CEO Compensation May 24th 2020

Is Bavarian Nordic A/S Growing?

On average over the last three years, Bavarian Nordic A/S has shrunk earnings per share by 64% each year (measured with a line of best fit). In the last year, its revenue is up 46%.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has Bavarian Nordic A/S Been A Good Investment?

Since shareholders would have lost about 30% over three years, some Bavarian Nordic A/S shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Paul Chaplin is paid around what is normal for the leaders of comparable size companies.

We would like to see somewhat stronger per share growth. And shareholder returns have been disappointing over the last three years. So many would argue that the CEO is certainly not underpaid. On another note, Bavarian Nordic has 4 warning signs (and 3 which are potentially serious) we think you should know about.

Important note: Bavarian Nordic may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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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. 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. Thank you for reading.