Yahoo Finance Why We Think Adyen N.V.'s (AMS:ADYEN) CEO Compensation Is Not Excessive At All
Key Insights
Adyen's Annual General Meeting to take place on 16th of May
CEO Pieter van der Does' total compensation includes salary of €725.0k
Total compensation is 50% below industry average
Adyen's three-year loss to shareholders was 27% while its EPS grew by 38% over the past three years
The performance at Adyen N.V. (AMS:ADYEN) has been rather lacklustre of late and shareholders may be wondering what CEO Pieter van der Does is planning to do about this. At the next AGM coming up on 16th of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.
View our latest analysis for Adyen
How Does Total Compensation For Pieter van der Does Compare With Other Companies In The Industry?
At the time of writing, our data shows that Adyen N.V. has a market capitalization of €38b, and reported total annual CEO compensation of €755k for the year to December 2023. That's a notable increase of 9.2% on last year. In particular, the salary of €725.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies in the the Netherlands Diversified Financial industry with market capitalizations above €7.4b, we found that the median total CEO compensation was €1.5m. In other words, Adyen pays its CEO lower than the industry median. Moreover, Pieter van der Does also holds €1.1b worth of Adyen stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | €725k | €672k | 96% |
Other | €30k | €20k | 4% |
Total Compensation | €755k | €692k | 100% |
On an industry level, around 42% of total compensation represents salary and 58% is other remuneration. Adyen pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Adyen N.V.'s Growth Numbers
Adyen N.V.'s earnings per share (EPS) grew 38% per year over the last three years. In the last year, its revenue is up 22%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Adyen N.V. Been A Good Investment?
With a three year total loss of 27% for the shareholders, Adyen N.V. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Pieter receives almost all of their compensation through a salary. The fact that shareholders have earned a negative share price return is certainly disconcerting. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Adyen that investors should be aware of in a dynamic business environment.
Important note: Adyen is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. 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. 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.
