Shareholders May Find It Hard To Justify Increasing Climeon AB (publ)'s (STO:CLIME B) CEO Compensation For Now

Key Insights

• Climeon will host its Annual General Meeting on 15th of May
• Salary of kr2.16m is part of CEO Lena Sundquist's total remuneration
• Total compensation is similar to the industry average
• Climeon's three-year loss to shareholders was 96% while its EPS grew by 21% over the past three years

The underwhelming share price performance of Climeon AB (publ) (STO:CLIME B) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 15th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 Climeon

How Does Total Compensation For Lena Sundquist Compare With Other Companies In The Industry?

According to our data, Climeon AB (publ) has a market capitalization of kr218m, and paid its CEO total annual compensation worth kr2.6m over the year to December 2023. That's a notable increase of 11% on last year. Notably, the salary which is kr2.16m, represents most of the total compensation being paid.

In comparison with other companies in the Swedish Electrical industry with market capitalizations under kr2.2b, the reported median total CEO compensation was kr2.6m. From this we gather that Lena Sundquist is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	kr2.2m	kr1.9m	83%
Other	kr441k	kr447k	17%
Total Compensation	kr2.6m	kr2.3m	100%

On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. Climeon is paying a higher share of its remuneration through a salary in comparison to the overall 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 Climeon AB (publ)'s Growth Numbers

Climeon AB (publ) has seen its earnings per share (EPS) increase by 21% a year over the past three years. Its revenue is up 27% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Climeon AB (publ) Been A Good Investment?

With a total shareholder return of -96% over three years, Climeon AB (publ) shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. 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 be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 6 warning signs for Climeon (4 are significant!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.