We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Axactor ASA's (OB:ACR) CEO For Now

Key Insights

• Axactor's Annual General Meeting to take place on 6th of May
• Total pay for CEO Johnny Vasili includes €414.4k salary
• The total compensation is 80% higher than the average for the industry
• Over the past three years, Axactor's EPS grew by 2.3% and over the past three years, the total loss to shareholders 23%

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In the past three years, the share price of Axactor ASA (OB:ACR) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 6th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Axactor

Comparing Axactor ASA's CEO Compensation With The Industry

According to our data, Axactor ASA has a market capitalization of kr1.4b, and paid its CEO total annual compensation worth €824k over the year to December 2024. Notably, that's an increase of 18% over the year before. In particular, the salary of €414.4k, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the Norway Consumer Finance industry with market capitalizations under kr2.1b, the reported median total CEO compensation was €457k. Accordingly, our analysis reveals that Axactor ASA pays Johnny Vasili north of the industry median. Furthermore, Johnny Vasili directly owns kr10.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	€414k	€398k	50%
Other	€410k	€302k	50%
Total Compensation	€824k	€700k	100%

On an industry level, roughly 56% of total compensation represents salary and 44% is other remuneration. It's interesting to note that Axactor allocates a smaller portion of compensation to salary in comparison to the broader 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.

A Look at Axactor ASA's Growth Numbers

Axactor ASA has seen its earnings per share (EPS) increase by 2.3% a year over the past three years. It saw its revenue drop 51% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Axactor ASA Been A Good Investment?

With a three year total loss of 23% for the shareholders, Axactor ASA would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Axactor that investors should be aware of in a dynamic business environment.

Switching gears from Axactor, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.