We Think Shareholders Are Less Likely To Approve A Pay Rise For Cherrypick Games S.A.'s (WSE:CHP) CEO For Now

Key Insights

• Cherrypick Games will host its Annual General Meeting on 21st of June
• Total pay for CEO Marcin Kwasnica includes zł532.0k salary
• The overall pay is comparable to the industry average
• Cherrypick Games' three-year loss to shareholders was 40% while its EPS grew by 77% over the past three years

Shareholders of Cherrypick Games S.A. (WSE:CHP) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 21st of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Cherrypick Games

How Does Total Compensation For Marcin Kwasnica Compare With Other Companies In The Industry?

Our data indicates that Cherrypick Games S.A. has a market capitalization of zł19m, and total annual CEO compensation was reported as zł532k for the year to December 2023. We note that's an increase of 84% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth zł532k.

For comparison, other companies in the Polish Entertainment industry with market capitalizations below zł818m, reported a median total CEO compensation of zł466k. This suggests that Cherrypick Games remunerates its CEO largely in line with the industry average. What's more, Marcin Kwasnica holds zł7.9m 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	zł532k	zł289k	100%
Other	-	-	-
Total Compensation	zł532k	zł289k	100%

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. Speaking on a company level, Cherrypick Games prefers to tread along a traditional path, disbursing all compensation through a salary. 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 Cherrypick Games S.A.'s Growth Numbers

Cherrypick Games S.A.'s earnings per share (EPS) grew 77% per year over the last three years. Its revenue is up 4.7% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Cherrypick Games S.A. Been A Good Investment?

The return of -40% over three years would not have pleased Cherrypick Games S.A. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Cherrypick Games pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Cherrypick Games (2 are a bit concerning!) that you should be aware of before investing here.

Important note: Cherrypick Games 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.

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