The Compensation For Indutrade AB (publ)'s (STO:INDT) CEO Looks Deserved And Here's Why

Key Insights

• Indutrade will host its Annual General Meeting on 29th of March
• CEO Bo Annvik's total compensation includes salary of kr10.1m
• The total compensation is similar to the average for the industry
• Indutrade's EPS grew by 22% over the past three years while total shareholder return over the past three years was 144%

It would be hard to discount the role that CEO Bo Annvik has played in delivering the impressive results at Indutrade AB (publ) (STO:INDT) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 29th of March. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Indutrade

How Does Total Compensation For Bo Annvik Compare With Other Companies In The Industry?

At the time of writing, our data shows that Indutrade AB (publ) has a market capitalization of kr76b, and reported total annual CEO compensation of kr19m for the year to December 2022. That's a modest increase of 5.8% on the prior year. We note that the salary of kr10.1m makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the Swedish Machinery industry with market capitalizations ranging from kr41b to kr124b, the reported median CEO total compensation was kr24m. So it looks like Indutrade compensates Bo Annvik in line with the median for the industry. Moreover, Bo Annvik also holds kr10m worth of Indutrade stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	kr10m	kr9.6m	53%
Other	kr9.0m	kr8.5m	47%
Total Compensation	kr19m	kr18m	100%

Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. There isn't a significant difference between Indutrade and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Indutrade AB (publ)'s Growth

Over the past three years, Indutrade AB (publ) has seen its earnings per share (EPS) grow by 22% per year. In the last year, its revenue is up 24%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Indutrade AB (publ) Been A Good Investment?

Boasting a total shareholder return of 144% over three years, Indutrade AB (publ) has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Indutrade that investors should look into moving forward.

Switching gears from Indutrade, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.