We Discuss Why L E Lundbergföretagen AB (publ)'s (STO:LUND B) CEO May Deserve A Higher Pay Packet

Key Insights

• L E Lundbergföretagen's Annual General Meeting to take place on 10th of April
• CEO Fredrik Lundberg's total compensation includes salary of kr1.50m
• Total compensation is 91% below industry average
• L E Lundbergföretagen's total shareholder return over the past three years was 19% while its EPS grew by 26% over the past three years

Shareholders will be pleased by the robust performance of L E Lundbergföretagen AB (publ) (STO:LUND B) recently and this will be kept in mind in the upcoming AGM on 10th of April. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

See our latest analysis for L E Lundbergföretagen

How Does Total Compensation For Fredrik Lundberg Compare With Other Companies In The Industry?

At the time of writing, our data shows that L E Lundbergföretagen AB (publ) has a market capitalization of kr141b, and reported total annual CEO compensation of kr1.5m for the year to December 2023. This was the same as last year. Notably, the salary of kr1.5m is the entirety of the CEO compensation.

For comparison, other companies in the Sweden Diversified Financial industry with market capitalizations above kr85b, reported a median total CEO compensation of kr17m. That is to say, Fredrik Lundberg is paid under the industry median. What's more, Fredrik Lundberg holds kr57b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	kr1.5m	kr1.5m	100%
Other	-	-	-
Total Compensation	kr1.5m	kr1.5m	100%

Speaking on an industry level, nearly 54% of total compensation represents salary, while the remainder of 46% is other remuneration. At the company level, L E Lundbergföretagen pays Fredrik Lundberg solely through a salary, preferring to go down a conventional route. 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.

L E Lundbergföretagen AB (publ)'s Growth

L E Lundbergföretagen AB (publ) has seen its earnings per share (EPS) increase by 26% a year over the past three years. It achieved revenue growth of 25% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

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

L E Lundbergföretagen AB (publ) has generated a total shareholder return of 19% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

L E Lundbergföretagen pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for L E Lundbergföretagen that investors should think about before committing capital to this stock.

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.