Increases to CEO Compensation Might Be Put On Hold For Now at Mips AB (publ) (STO:MIPS)

Key Insights

• Mips' Annual General Meeting to take place on 7th of May
• CEO Max Strandwitz's total compensation includes salary of kr4.60m
• The overall pay is 282% above the industry average
• Mips' EPS declined by 19% over the past three years while total shareholder loss over the past three years was 43%

We've discovered 1 warning sign about Mips. View them for free.

In the past three years, the share price of Mips AB (publ) (STO:MIPS) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also poor, despite revenues growing. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 7th of May, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for Mips

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

According to our data, Mips AB (publ) has a market capitalization of kr9.1b, and paid its CEO total annual compensation worth kr7.1m over the year to December 2024. That's a notable increase of 15% on last year. Notably, the salary which is kr4.60m, represents most of the total compensation being paid.

On comparing similar companies from the Sweden Leisure industry with market caps ranging from kr3.9b to kr15b, we found that the median CEO total compensation was kr1.9m. Hence, we can conclude that Max Strandwitz is remunerated higher than the industry median. What's more, Max Strandwitz holds kr27m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	kr4.6m	kr4.4m	64%
Other	kr2.5m	kr1.8m	36%
Total Compensation	kr7.1m	kr6.2m	100%

On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. It's interesting to note that Mips allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Mips AB (publ)'s Growth

Over the last three years, Mips AB (publ) has shrunk its earnings per share by 19% per year. It achieved revenue growth of 47% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Mips AB (publ) Been A Good Investment?

The return of -43% over three years would not have pleased Mips AB (publ) shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Mips that you should be aware of before investing.

Important note: Mips 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.