Should Shareholders Reconsider HusCompagniet A/S' (CPH:HUSCO) CEO Compensation Package?

Key Insights

• HusCompagniet will host its Annual General Meeting on 11th of April
• Total pay for CEO Martin Ravn-Nielsen includes kr.4.20m salary
• The overall pay is 38% above the industry average
• Over the past three years, HusCompagniet's EPS fell by 53% and over the past three years, the total loss to shareholders 54%

Shareholders will probably not be too impressed with the underwhelming results at HusCompagniet A/S (CPH:HUSCO) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 11th of April. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for HusCompagniet

Comparing HusCompagniet A/S' CEO Compensation With The Industry

Our data indicates that HusCompagniet A/S has a market capitalization of kr.1.2b, and total annual CEO compensation was reported as kr.7.9m for the year to December 2023. We note that's an increase of 13% above last year. In particular, the salary of kr.4.20m, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the Denmark Consumer Durables industry with market capitalizations ranging between kr.689m and kr.2.8b had a median total CEO compensation of kr.5.7m. Accordingly, our analysis reveals that HusCompagniet A/S pays Martin Ravn-Nielsen north of the industry median. What's more, Martin Ravn-Nielsen holds kr.16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	kr.4.2m	kr.4.2m	53%
Other	kr.3.7m	kr.2.8m	47%
Total Compensation	kr.7.9m	kr.7.0m	100%

On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. There isn't a significant difference between HusCompagniet and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

HusCompagniet A/S' Growth

Over the last three years, HusCompagniet A/S has shrunk its earnings per share by 53% per year. In the last year, its revenue is down 45%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has HusCompagniet A/S Been A Good Investment?

With a total shareholder return of -54% over three years, HusCompagniet A/S shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for HusCompagniet that investors should think about before committing capital to this stock.

Important note: HusCompagniet 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.