Here's Why Shareholders Will Not Be Complaining About Nilörngruppen AB's (STO:NIL B) CEO Pay Packet

Key Insights

• Nilörngruppen's Annual General Meeting to take place on 3rd of May
• Salary of kr1.78m is part of CEO Krister Magnusson's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Nilörngruppen's EPS grew by 26% and over the past three years, the total shareholder return was 163%

It would be hard to discount the role that CEO Krister Magnusson has played in delivering the impressive results at Nilörngruppen AB (STO:NIL B) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 3rd of May. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Nilörngruppen

Comparing Nilörngruppen AB's CEO Compensation With The Industry

According to our data, Nilörngruppen AB has a market capitalization of kr796m, and paid its CEO total annual compensation worth kr4.1m over the year to December 2022. That's a slight decrease of 5.8% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at kr1.8m.

For comparison, other companies in the Sweden Luxury industry with market capitalizations below kr2.1b, reported a median total CEO compensation of kr4.0m. This suggests that Nilörngruppen remunerates its CEO largely in line with the industry average. Moreover, Krister Magnusson also holds kr5.9m worth of Nilörngruppen stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	kr1.8m	kr1.6m	43%
Other	kr2.3m	kr2.7m	57%
Total Compensation	kr4.1m	kr4.4m	100%

On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. Nilörngruppen sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Nilörngruppen AB's Growth

Nilörngruppen AB's earnings per share (EPS) grew 26% per year over the last three years. In the last year, its revenue is up 8.1%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Nilörngruppen AB Been A Good Investment?

Most shareholders would probably be pleased with Nilörngruppen AB for providing a total return of 163% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

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

Important note: Nilörngruppen 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.

Have 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.