We Take A Look At Why Arctic Paper S.A.'s (WSE:ATC) CEO Compensation Is Well Earned

Key Insights

• Arctic Paper will host its Annual General Meeting on 29th of May
• CEO Michal Jarczynski's total compensation includes salary of zł1.03m
• The total compensation is similar to the average for the industry
• Arctic Paper's total shareholder return over the past three years was 339% while its EPS grew by 38% over the past three years

We have been pretty impressed with the performance at Arctic Paper S.A. (WSE:ATC) recently and CEO Michal Jarczynski deserves a mention for their role in it. Coming up to the next AGM on 29th of May, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Arctic Paper

Comparing Arctic Paper S.A.'s CEO Compensation With The Industry

According to our data, Arctic Paper S.A. has a market capitalization of zł1.5b, and paid its CEO total annual compensation worth zł1.5m over the year to December 2023. That's a notable increase of 34% on last year. We note that the salary portion, which stands at zł1.03m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Poland Forestry industry with market capitalizations between zł788m and zł3.2b, we discovered that the median CEO total compensation of that group was zł2.0m. This suggests that Arctic Paper remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	zł1.0m	zł803k	68%
Other	zł478k	zł316k	32%
Total Compensation	zł1.5m	zł1.1m	100%

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. Arctic Paper is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Arctic Paper S.A.'s Growth

Over the past three years, Arctic Paper S.A. has seen its earnings per share (EPS) grow by 38% per year. In the last year, its revenue is down 26%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Arctic Paper S.A. Been A Good Investment?

Most shareholders would probably be pleased with Arctic Paper S.A. for providing a total return of 339% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Arctic Paper that investors should look into moving forward.

Important note: Arctic Paper 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.