Most Shareholders Will Probably Agree With Skanska AB (publ)'s (STO:SKA B) CEO Compensation
Key Insights
- Skanska's Annual General Meeting to take place on 7th of April
- CEO Anders Danielsson's total compensation includes salary of kr14.8m
- Total compensation is similar to the industry average
- Skanska's total shareholder return over the past three years was 12% while its EPS was down 6.8% over the past three years
Despite positive share price growth of 12% for Skanska AB (publ) (STO:SKA B) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 7th of April. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
View our latest analysis for Skanska
How Does Total Compensation For Anders Danielsson Compare With Other Companies In The Industry?
Our data indicates that Skanska AB (publ) has a market capitalization of kr91b, and total annual CEO compensation was reported as kr31m for the year to December 2024. Notably, that's an increase of 49% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at kr15m.
On examining similar-sized companies in the Swedish Construction industry with market capitalizations between kr40b and kr121b, we discovered that the median CEO total compensation of that group was kr31m. From this we gather that Anders Danielsson is paid around the median for CEOs in the industry. Moreover, Anders Danielsson also holds kr63m worth of Skanska stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | kr15m | kr14m | 48% |
| Other | kr16m | kr6.2m | 52% |
| Total Compensation | kr31m | kr20m | 100% |
On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Skanska 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.
A Look at Skanska AB (publ)'s Growth Numbers
Over the last three years, Skanska AB (publ) has shrunk its earnings per share by 6.8% per year. It achieved revenue growth of 5.6% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. 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 Skanska AB (publ) Been A Good Investment?
Skanska AB (publ) has generated a total shareholder return of 12% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Skanska that investors should be aware of in a dynamic business environment.
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.
Valuation is complex, but we're here to simplify it.
Discover if Skanska might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.