Mips AB (publ)'s (STO:MIPS) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Mips to hold its Annual General Meeting on 7th of May
• Total pay for CEO Max Strandwitz includes kr4.41m salary
• Total compensation is 47% above industry average
• Mips' EPS declined by 26% over the past three years while total shareholder loss over the past three years was 41%

The results at Mips AB (publ) (STO:MIPS) have been quite disappointing recently and CEO Max Strandwitz bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 7th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Mips

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

Our data indicates that Mips AB (publ) has a market capitalization of kr10.0b, and total annual CEO compensation was reported as kr6.2m for the year to December 2023. That's a slight decrease of 5.9% on the prior year. Notably, the salary which is kr4.41m, represents most of the total compensation being paid.

For comparison, other companies in the Sweden Leisure industry with market capitalizations ranging between kr4.4b and kr18b had a median total CEO compensation of kr4.2m. Hence, we can conclude that Max Strandwitz is remunerated higher than the industry median. Moreover, Max Strandwitz also holds kr29m worth of Mips stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	kr4.4m	kr4.2m	71%
Other	kr1.8m	kr2.3m	29%
Total Compensation	kr6.2m	kr6.6m	100%

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. Our data reveals that Mips 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.

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

Over the last three years, Mips AB (publ) has shrunk its earnings per share by 26% per year. In the last year, its revenue is down 32%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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?

With a total shareholder return of -41% over three years, Mips AB (publ) shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in Mips we think you should know about.

Switching gears from Mips, 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.