Shareholders Will Probably Hold Off On Increasing NCC AB (publ)'s (STO:NCC B) CEO Compensation For The Time Being

Key Insights

• NCC's Annual General Meeting to take place on 9th of April
• CEO Tomas Carlsson's total compensation includes salary of kr11.4m
• Total compensation is 49% above industry average
• NCC's EPS grew by 11% over the past three years while total shareholder return over the past three years was 8.8%

Under the guidance of CEO Tomas Carlsson, NCC AB (publ) (STO:NCC B) has performed reasonably well recently. As shareholders go into the upcoming AGM on 9th of April, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for NCC

How Does Total Compensation For Tomas Carlsson Compare With Other Companies In The Industry?

At the time of writing, our data shows that NCC AB (publ) has a market capitalization of kr14b, and reported total annual CEO compensation of kr23m for the year to December 2023. We note that's a decrease of 12% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at kr11m.

In comparison with other companies in the Swedish Construction industry with market capitalizations ranging from kr11b to kr34b, the reported median CEO total compensation was kr16m. Hence, we can conclude that Tomas Carlsson is remunerated higher than the industry median. Furthermore, Tomas Carlsson directly owns kr20m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	kr11m	kr11m	49%
Other	kr12m	kr16m	51%
Total Compensation	kr23m	kr27m	100%

Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. NCC sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NCC AB (publ)'s Growth

NCC AB (publ) has seen its earnings per share (EPS) increase by 11% a year over the past three years. Its revenue is up 5.0% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has NCC AB (publ) Been A Good Investment?

NCC AB (publ) has generated a total shareholder return of 8.8% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for NCC (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: NCC is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.