It Looks Like Peab AB (publ)'s (STO:PEAB B) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Peab to hold its Annual General Meeting on 6th of May
• Salary of kr9.04m is part of CEO Jesper Göransson's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Peab's EPS fell by 14% and over the past three years, the total loss to shareholders 35%

Peab AB (publ) (STO:PEAB B) has not performed well recently and CEO Jesper Göransson will probably need to up their game. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Peab

How Does Total Compensation For Jesper Göransson Compare With Other Companies In The Industry?

Our data indicates that Peab AB (publ) has a market capitalization of kr19b, and total annual CEO compensation was reported as kr16m for the year to December 2023. That's just a smallish increase of 7.8% on last year. Notably, the salary which is kr9.04m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Swedish Construction industry with market capitalizations ranging from kr11b to kr35b, the reported median CEO total compensation was kr17m. From this we gather that Jesper Göransson is paid around the median for CEOs in the industry. What's more, Jesper Göransson holds kr90m 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	kr9.0m	kr8.8m	56%
Other	kr7.0m	kr6.1m	44%
Total Compensation	kr16m	kr15m	100%

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. Our data reveals that Peab allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Peab AB (publ)'s Growth

Over the last three years, Peab AB (publ) has shrunk its earnings per share by 14% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Peab AB (publ) Been A Good Investment?

The return of -35% over three years would not have pleased Peab AB (publ) shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Peab (1 is a bit concerning!) that you should be aware of before investing here.

Switching gears from Peab, 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.