Shareholders May Find It Hard To Justify Increasing Peab AB (publ)'s (STO:PEAB B) CEO Compensation For Now

Key Insights

• Peab's Annual General Meeting to take place on 6th of May
• Total pay for CEO Jesper Göransson includes kr9.90m salary
• Total compensation is similar to the industry average
• Over the past three years, Peab's EPS grew by 1.1% and over the past three years, the total loss to shareholders 0.6%

We've discovered 3 warning signs about Peab. View them for free.

In the past three years, the share price of Peab AB (publ) (STO:PEAB B) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 6th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out 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 kr23b, and total annual CEO compensation was reported as kr24m for the year to December 2024. Notably, that's an increase of 49% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at kr9.9m.

In comparison with other companies in the Swedish Construction industry with market capitalizations ranging from kr9.6b to kr31b, the reported median CEO total compensation was kr27m. So it looks like Peab compensates Jesper Göransson in line with the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	kr9.9m	kr9.0m	42%
Other	kr14m	kr7.0m	58%
Total Compensation	kr24m	kr16m	100%

Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. Peab sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Peab AB (publ)'s Growth

Peab AB (publ)'s earnings per share (EPS) grew 1.1% per year over the last three years. Revenue was pretty flat on last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Peab AB (publ) Been A Good Investment?

Since shareholders would have lost about 0.6% over three years, some Peab AB (publ) investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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 3 warning signs for Peab (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.