Here's Why It's Unlikely That Ambu A/S' (CPH:AMBU B) CEO Will See A Pay Rise This Year

Key Insights

• Ambu will host its Annual General Meeting on 4th of December
• CEO Britt Jensen's total compensation includes salary of kr.7.70m
• The total compensation is 82% higher than the average for the industry
• Ambu's EPS declined by 3.5% over the past three years while total shareholder loss over the past three years was 39%

Shareholders will probably not be too impressed with the underwhelming results at Ambu A/S (CPH:AMBU B) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 4th of December. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Ambu

How Does Total Compensation For Britt Jensen Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ambu A/S has a market capitalization of kr.30b, and reported total annual CEO compensation of kr.23m for the year to September 2024. We note that's an increase of 24% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at kr.7.7m.

On examining similar-sized companies in the Denmark Medical Equipment industry with market capitalizations between kr.14b and kr.45b, we discovered that the median CEO total compensation of that group was kr.13m. Hence, we can conclude that Britt Jensen is remunerated higher than the industry median. Moreover, Britt Jensen also holds kr.6.7m worth of Ambu stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	kr.7.7m	kr.7.4m	34%
Other	kr.15m	kr.11m	66%
Total Compensation	kr.23m	kr.19m	100%

Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. It's interesting to note that Ambu allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Ambu A/S' Growth

Over the last three years, Ambu A/S has shrunk its earnings per share by 3.5% per year. In the last year, its revenue is up 13%.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Ambu A/S Been A Good Investment?

The return of -39% over three years would not have pleased Ambu A/S shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Ambu that investors should look into moving forward.

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.

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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.