Most Shareholders Will Probably Agree With L E Lundbergföretagen AB (publ)'s (STO:LUND B) CEO Compensation

Key Insights

• L E Lundbergföretagen to hold its Annual General Meeting on 9th of April
• CEO Fredrik Lundberg's total compensation includes salary of kr1.50m
• Total compensation is 83% below industry average
• L E Lundbergföretagen's total shareholder return over the past three years was 4.8% while its EPS was down 18% over the past three years

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Shareholders may be wondering what CEO Fredrik Lundberg plans to do to improve the less than great performance at L E Lundbergföretagen AB (publ) (STO:LUND B) recently. At the next AGM coming up on 9th of April, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for L E Lundbergföretagen

Comparing L E Lundbergföretagen AB (publ)'s CEO Compensation With The Industry

At the time of writing, our data shows that L E Lundbergföretagen AB (publ) has a market capitalization of kr124b, and reported total annual CEO compensation of kr1.5m for the year to December 2024. This was the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth kr1.5m.

For comparison, other companies in the Sweden Diversified Financial industry with market capitalizations above kr79b, reported a median total CEO compensation of kr8.7m. Accordingly, L E Lundbergföretagen pays its CEO under the industry median. Moreover, Fredrik Lundberg also holds kr51b worth of L E Lundbergföretagen stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. Speaking on a company level, L E Lundbergföretagen prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

A Look at L E Lundbergföretagen AB (publ)'s Growth Numbers

Over the last three years, L E Lundbergföretagen AB (publ) has shrunk its earnings per share by 18% per year. In the last year, its revenue is down 5.6%.

Few shareholders would be pleased to read that EPS have declined. 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has L E Lundbergföretagen AB (publ) Been A Good Investment?

With a total shareholder return of 4.8% over three years, L E Lundbergföretagen AB (publ) has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

L E Lundbergföretagen pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for L E Lundbergföretagen that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.