It Looks Like Profoto Holding AB (publ)'s (STO:PRFO) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Profoto Holding will host its Annual General Meeting on 7th of May
• Total pay for CEO Anders Hedebark includes kr4.17m salary
• The total compensation is similar to the average for the industry
• Profoto Holding's EPS declined by 7.3% over the past three years while total shareholder loss over the past three years was 75%

We've discovered 2 warning signs about Profoto Holding. View them for free.

Shareholders will probably not be too impressed with the underwhelming results at Profoto Holding AB (publ) (STO:PRFO) recently. 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.

Check out our latest analysis for Profoto Holding

How Does Total Compensation For Anders Hedebark Compare With Other Companies In The Industry?

According to our data, Profoto Holding AB (publ) has a market capitalization of kr1.0b, and paid its CEO total annual compensation worth kr6.0m over the year to December 2024. We note that's a decrease of 13% compared to last year. We note that the salary portion, which stands at kr4.17m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Swedish Consumer Durables industry with market capitalizations under kr1.9b, the reported median total CEO compensation was kr5.1m. This suggests that Profoto Holding remunerates its CEO largely in line with the industry average.

Component	2024	2023	Proportion (2024)
Salary	kr4.2m	kr4.5m	70%
Other	kr1.8m	kr2.4m	30%
Total Compensation	kr6.0m	kr6.9m	100%

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. Profoto Holding pays out 70% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Profoto Holding AB (publ)'s Growth Numbers

Profoto Holding AB (publ) has reduced its earnings per share by 7.3% a year over the last three years. It saw its revenue drop 7.1% over the last year.

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. 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 Profoto Holding AB (publ) Been A Good Investment?

With a total shareholder return of -75% over three years, Profoto Holding AB (publ) shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Profoto Holding you should be aware of, and 1 of them is concerning.

Important note: Profoto Holding 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.