We Discuss Why Nolato AB (publ)'s (STO:NOLA B) CEO Compensation May Be Closely Reviewed

Key Insights

• Nolato will host its Annual General Meeting on 6th of May
• CEO Christer Wahlquist's total compensation includes salary of kr6.13m
• The overall pay is comparable to the industry average
• Over the past three years, Nolato's EPS fell by 19% and over the past three years, the total loss to shareholders 30%

Shareholders will probably not be too impressed with the underwhelming results at Nolato AB (publ) (STO:NOLA B) recently. At the upcoming AGM on 6th of May, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Nolato

Comparing Nolato AB (publ)'s CEO Compensation With The Industry

According to our data, Nolato AB (publ) has a market capitalization of kr15b, and paid its CEO total annual compensation worth kr11m over the year to December 2023. That's a notable increase of 27% on last year. Notably, the salary which is kr6.13m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Swedish Industrials industry with market capitalizations ranging from kr11b to kr35b, the reported median CEO total compensation was kr10m. This suggests that Nolato remunerates its CEO largely in line with the industry average. Furthermore, Christer Wahlquist directly owns kr15m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	kr6.1m	kr5.7m	55%
Other	kr5.0m	kr3.1m	45%
Total Compensation	kr11m	kr8.8m	100%

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. Nolato pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Nolato AB (publ)'s Growth Numbers

Over the last three years, Nolato AB (publ) has shrunk its earnings per share by 19% per year. It saw its revenue drop 11% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Nolato AB (publ) Been A Good Investment?

The return of -30% over three years would not have pleased Nolato AB (publ) shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Nolato that investors should be aware of in a dynamic business environment.

Switching gears from Nolato, 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.

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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.