Here's Why Shareholders May Want To Be Cautious With Increasing Alimak Group AB (publ)'s (STO:ALIG) CEO Pay Packet

Key Insights

• Alimak Group will host its Annual General Meeting on 29th of April
• CEO Ole Jodahl's total compensation includes salary of kr4.90m
• The overall pay is 44% above the industry average
• Alimak Group's EPS grew by 13% over the past three years while total shareholder loss over the past three years was 7.1%

As many shareholders of Alimak Group AB (publ) (STO:ALIG) will be aware, they have not made a gain on their investment in the past three years. 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 29th of April. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Alimak Group

Comparing Alimak Group AB (publ)'s CEO Compensation With The Industry

Our data indicates that Alimak Group AB (publ) has a market capitalization of kr10b, and total annual CEO compensation was reported as kr11m for the year to December 2023. That's a notable increase of 15% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at kr4.9m.

For comparison, other companies in the Swedish Machinery industry with market capitalizations ranging between kr4.4b and kr17b had a median total CEO compensation of kr7.4m. Accordingly, our analysis reveals that Alimak Group AB (publ) pays Ole Jodahl north of the industry median. Moreover, Ole Jodahl also holds kr5.3m worth of Alimak 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	kr4.9m	kr4.7m	46%
Other	kr5.8m	kr4.6m	54%
Total Compensation	kr11m	kr9.3m	100%

Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. Our data reveals that Alimak Group allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Alimak Group AB (publ)'s Growth

Alimak Group AB (publ)'s earnings per share (EPS) grew 13% per year over the last three years. It achieved revenue growth of 57% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Alimak Group AB (publ) Been A Good Investment?

Given the total shareholder loss of 7.1% over three years, many shareholders in Alimak Group AB (publ) are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Alimak Group that investors should look into moving forward.

Switching gears from Alimak Group, 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.