Balco Group AB's (STO:BALCO) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Balco Group's Annual General Meeting to take place on 14th of May
• Total pay for CEO Camilla Ekdahl includes kr2.82m salary
• The total compensation is similar to the average for the industry
• Over the past three years, Balco Group's EPS fell by 22% and over the past three years, the total loss to shareholders 50%

Shareholders will probably not be too impressed with the underwhelming results at Balco Group AB (STO:BALCO) recently. At the upcoming AGM on 14th of May, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Balco Group

How Does Total Compensation For Camilla Ekdahl Compare With Other Companies In The Industry?

At the time of writing, our data shows that Balco Group AB has a market capitalization of kr973m, and reported total annual CEO compensation of kr5.2m for the year to December 2023. That's a notable increase of 19% on last year. Notably, the salary which is kr2.82m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Swedish Building industry with market capitalizations under kr2.2b, the reported median total CEO compensation was kr4.7m. This suggests that Balco Group remunerates its CEO largely in line with the industry average. What's more, Camilla Ekdahl holds kr718k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	kr2.8m	kr1.9m	54%
Other	kr2.4m	kr2.5m	46%
Total Compensation	kr5.2m	kr4.4m	100%

On an industry level, around 65% of total compensation represents salary and 35% is other remuneration. In Balco Group's case, non-salary compensation represents a greater slice of total remuneration, 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 Balco Group AB's Growth Numbers

Over the last three years, Balco Group AB has shrunk its earnings per share by 22% per year. It saw its revenue drop 11% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Balco Group AB Been A Good Investment?

With a total shareholder return of -50% over three years, Balco Group AB shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 3 warning signs for Balco Group that investors should look into moving forward.

Switching gears from Balco 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.