Shareholders Will Likely Find Digitalist Group Plc's (HEL:DIGIGR) CEO Compensation Acceptable

Key Insights

• Digitalist Group's Annual General Meeting to take place on 25th of April
• Salary of €123.3k is part of CEO Magnus Leijonborg's total remuneration
• The overall pay is 35% below the industry average
• Digitalist Group's EPS grew by 35% over the past three years while total shareholder loss over the past three years was 83%

Performance at Digitalist Group Plc (HEL:DIGIGR) has been rather uninspiring recently and shareholders may be wondering how CEO Magnus Leijonborg plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 25th of April. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Digitalist Group

Comparing Digitalist Group Plc's CEO Compensation With The Industry

At the time of writing, our data shows that Digitalist Group Plc has a market capitalization of €5.6m, and reported total annual CEO compensation of €153k for the year to December 2023. That's a notable increase of 20% on last year. We note that the salary portion, which stands at €123.3k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Finnish IT industry with market capitalizations below €188m, reported a median total CEO compensation of €235k. That is to say, Magnus Leijonborg is paid under the industry median.

Component	2023	2022	Proportion (2023)
Salary	€123k	€124k	81%
Other	€30k	€3.6k	19%
Total Compensation	€153k	€127k	100%

On an industry level, roughly 71% of total compensation represents salary and 29% is other remuneration. According to our research, Digitalist Group has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.

Digitalist Group Plc's Growth

Digitalist Group Plc's earnings per share (EPS) grew 35% per year over the last three years. Its revenue is down 11% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Digitalist Group Plc Been A Good Investment?

Few Digitalist Group Plc shareholders would feel satisfied with the return of -83% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss is certainly disheartening. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. 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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 3 which are a bit unpleasant) in Digitalist Group we think you should know about.

Important note: Digitalist Group 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.