We Think Shareholders Are Less Likely To Approve A Pay Rise For Evolution AB (publ)'s (STO:EVO) CEO For Now

Key Insights

• Evolution will host its Annual General Meeting on 9th of May
• CEO Martin Carlesund's total compensation includes salary of €3.09m
• The overall pay is comparable to the industry average
• Evolution's EPS grew by 24% over the past three years while total shareholder loss over the past three years was 30%

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In the past three years, the share price of Evolution AB (publ) (STO:EVO) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 9th of May could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Evolution

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

At the time of writing, our data shows that Evolution AB (publ) has a market capitalization of kr140b, and reported total annual CEO compensation of €4.6m for the year to December 2024. We note that's a decrease of 28% compared to last year. Notably, the salary which is €3.09m, represents most of the total compensation being paid.

For comparison, other companies in the Swedish Hospitality industry with market capitalizations above kr77b, reported a median total CEO compensation of €4.9m. So it looks like Evolution compensates Martin Carlesund in line with the median for the industry. Furthermore, Martin Carlesund directly owns kr467m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	€3.1m	€2.6m	67%
Other	€1.5m	€3.8m	33%
Total Compensation	€4.6m	€6.4m	100%

Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. It's interesting to note that Evolution pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

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

Evolution AB (publ)'s earnings per share (EPS) grew 24% per year over the last three years. In the last year, its revenue is up 19%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Evolution AB (publ) Been A Good Investment?

Few Evolution AB (publ) shareholders would feel satisfied with the return of -30% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Evolution (free visualization of insider trades).

Important note: Evolution 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.