How Is NAXS' (STO:NAXS) CEO Compensated?

This article will reflect on the compensation paid to Lennart Svantesson who has served as CEO of NAXS AB (publ) (STO:NAXS) since 2011. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for NAXS

Comparing NAXS AB (publ)'s CEO Compensation With the industry

Our data indicates that NAXS AB (publ) has a market capitalization of kr611m, and total annual CEO compensation was reported as kr550k for the year to December 2020. This means that the compensation hasn't changed much from last year. Notably, the salary of kr550k is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below kr1.7b, we found that the median total CEO compensation was kr1.8m. That is to say, Lennart Svantesson is paid under the industry median. What's more, Lennart Svantesson holds kr1.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 9.8% is other remuneration. On a company level, NAXS prefers to reward its CEO through a salary, opting not to pay Lennart Svantesson through non-salary benefits. 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 NAXS AB (publ)'s Growth Numbers

Over the last three years, NAXS AB (publ) has shrunk its earnings per share by 9.4% per year. In the last year, its revenue is down 38%.

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. 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 NAXS AB (publ) Been A Good Investment?

NAXS AB (publ) has served shareholders reasonably well, with a total return of 29% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

NAXS rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Lennart is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been unexciting, and EPS growth has fared even worse. So, although we can't say CEO compensation is very high, shareholders might want to see an improvement in overall performance before agreeing that Lennart deserves a bump.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for NAXS you should be aware of, and 1 of them shouldn't be ignored.

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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