Why We Think Eolus Vind AB (publ)'s (STO:EOLU B) CEO Compensation Is Not Excessive At All

Key Insights

• Eolus Vind to hold its Annual General Meeting on 16th of May
• CEO Per Witalisson's total compensation includes salary of kr2.81m
• Total compensation is 54% below industry average
• Eolus Vind's EPS grew by 57% over the past three years while total shareholder loss over the past three years was 59%

The performance at Eolus Vind AB (publ) (STO:EOLU B) has been rather lacklustre of late and shareholders may be wondering what CEO Per Witalisson is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 16th of May. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Eolus Vind

How Does Total Compensation For Per Witalisson Compare With Other Companies In The Industry?

At the time of writing, our data shows that Eolus Vind AB (publ) has a market capitalization of kr1.9b, and reported total annual CEO compensation of kr4.2m for the year to December 2023. Notably, that's an increase of 20% over the year before. In particular, the salary of kr2.81m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Swedish Construction industry with market capitalizations ranging between kr1.1b and kr4.4b had a median total CEO compensation of kr9.0m. That is to say, Per Witalisson is paid under the industry median. Moreover, Per Witalisson also holds kr5.5m worth of Eolus Vind 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	kr2.8m	kr2.8m	68%
Other	kr1.3m	kr680k	32%
Total Compensation	kr4.2m	kr3.5m	100%

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. It's interesting to note that Eolus Vind pays out a greater portion of remuneration through salary, compared to the 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.

Eolus Vind AB (publ)'s Growth

Over the past three years, Eolus Vind AB (publ) has seen its earnings per share (EPS) grow by 57% per year. It saw its revenue drop 2.4% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Eolus Vind AB (publ) Been A Good Investment?

With a total shareholder return of -59% over three years, Eolus Vind AB (publ) shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Eolus Vind (2 can't be ignored!) that you should be aware of before investing here.

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.