Shareholders May Be Wary Of Increasing Hoist Finance AB (publ)'s (STO:HOFI) CEO Compensation Package

By
Simply Wall St
Published
April 05, 2021
OM:HOFI

Hoist Finance AB (publ) (STO:HOFI) has not performed well recently and CEO Klaus-Anders Nysteen will probably need to up their game. At the upcoming AGM on 13 April 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Hoist Finance

How Does Total Compensation For Klaus-Anders Nysteen Compare With Other Companies In The Industry?

According to our data, Hoist Finance AB (publ) has a market capitalization of kr3.2b, and paid its CEO total annual compensation worth kr7.5m over the year to December 2020. That's a notable decrease of 25% on last year. We note that the salary portion, which stands at kr5.33m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between kr1.7b and kr7.0b had a median total CEO compensation of kr5.8m. So it looks like Hoist Finance compensates Klaus-Anders Nysteen in line with the median for the industry. Furthermore, Klaus-Anders Nysteen directly owns kr2.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary kr5.3m kr5.4m 71%
Other kr2.1m kr4.6m 29%
Total Compensationkr7.5m kr10m100%

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. Hoist Finance pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
OM:HOFI CEO Compensation April 6th 2021

Hoist Finance AB (publ)'s Growth

Over the last three years, Hoist Finance AB (publ) has shrunk its earnings per share by 39% per year. It saw its revenue drop 26% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Hoist Finance AB (publ) Been A Good Investment?

With a total shareholder return of -52% over three years, Hoist Finance AB (publ) shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid 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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Hoist Finance that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. 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.
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