Shareholders Will Probably Hold Off On Increasing Absolent Air Care Group AB (publ)'s (STO:ABSO) CEO Compensation For The Time Being

Key Insights

• Absolent Air Care Group's Annual General Meeting to take place on 16th of May
• CEO Axel Berntsson's total compensation includes salary of kr3.43m
• The overall pay is comparable to the industry average
• Absolent Air Care Group's three-year loss to shareholders was 13% while its EPS grew by 58% over the past three years

In the past three years, the share price of Absolent Air Care Group AB (publ) (STO:ABSO) has struggled to generate growth for its shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 16th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Absolent Air Care Group

Comparing Absolent Air Care Group AB (publ)'s CEO Compensation With The Industry

Our data indicates that Absolent Air Care Group AB (publ) has a market capitalization of kr3.9b, and total annual CEO compensation was reported as kr5.2m for the year to December 2023. Notably, that's a decrease of 19% over the year before. In particular, the salary of kr3.43m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Swedish Building industry with market caps ranging from kr2.2b to kr8.7b, we found that the median CEO total compensation was kr5.5m. This suggests that Absolent Air Care Group remunerates its CEO largely in line with the industry average. Moreover, Axel Berntsson also holds kr66m worth of Absolent Air Care Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	kr3.4m	kr3.2m	66%
Other	kr1.8m	kr3.2m	34%
Total Compensation	kr5.2m	kr6.4m	100%

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. There isn't a significant difference between Absolent Air Care Group and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Absolent Air Care Group AB (publ)'s Growth

Over the past three years, Absolent Air Care Group AB (publ) has seen its earnings per share (EPS) grow by 58% per year. Its revenue is up 2.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Absolent Air Care Group AB (publ) Been A Good Investment?

With a three year total loss of 13% for the shareholders, Absolent Air Care Group AB (publ) would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. 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.

So you may want to check if insiders are buying Absolent Air Care Group shares with their own money (free access).

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.