Most Shareholders Will Probably Find That The Compensation For Instalco AB (publ)'s (STO:INSTAL) CEO Is Reasonable

Key Insights

• Instalco to hold its Annual General Meeting on 6th of May
• Salary of kr4.41m is part of CEO Robin Boheman's total remuneration
• The total compensation is 70% less than the average for the industry
• Instalco's EPS grew by 8.1% over the past three years while total shareholder loss over the past three years was 44%

The performance at Instalco AB (publ) (STO:INSTAL) has been rather lacklustre of late and shareholders may be wondering what CEO Robin Boheman is planning to do about this. At the next AGM coming up on 6th of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Instalco

How Does Total Compensation For Robin Boheman Compare With Other Companies In The Industry?

At the time of writing, our data shows that Instalco AB (publ) has a market capitalization of kr10b, and reported total annual CEO compensation of kr6.2m for the year to December 2023. Notably, that's an increase of 41% over the year before. In particular, the salary of kr4.41m, 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 kr4.4b and kr17b had a median total CEO compensation of kr21m. That is to say, Robin Boheman is paid under the industry median. What's more, Robin Boheman holds kr2.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	kr4.4m	kr3.3m	71%
Other	kr1.8m	kr1.1m	29%
Total Compensation	kr6.2m	kr4.4m	100%

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. It's interesting to note that Instalco pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Instalco AB (publ)'s Growth

Instalco AB (publ) has seen its earnings per share (EPS) increase by 8.1% a year over the past three years. Its revenue is up 18% over the last year.

We think the revenue growth is good. And, while modest, the EPS growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. 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 Instalco AB (publ) Been A Good Investment?

The return of -44% over three years would not have pleased Instalco AB (publ) shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. Perhaps the poor price performance may have something to do with the the fact that earnings per share growth has not been performing as strongly either. 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 compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Instalco that you should be aware of before investing.

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.