Increases to AAK AB (publ.)'s (STO:AAK) CEO Compensation Might Cool off for now

Key Insights

• AAK AB (publ.) will host its Annual General Meeting on 8th of May
• CEO Johan Westman's total compensation includes salary of kr10.9m
• The total compensation is 38% higher than the average for the industry
• AAK AB (publ.)'s EPS grew by 26% over the past three years while total shareholder return over the past three years was 50%

CEO Johan Westman has done a decent job of delivering relatively good performance at AAK AB (publ.) (STO:AAK) recently. As shareholders go into the upcoming AGM on 8th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for AAK AB (publ.)

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

Our data indicates that AAK AB (publ.) has a market capitalization of kr74b, and total annual CEO compensation was reported as kr28m for the year to December 2023. We note that's a small decrease of 4.4% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at kr11m.

In comparison with other companies in the Swedish Food industry with market capitalizations ranging from kr44b to kr132b, the reported median CEO total compensation was kr20m. Accordingly, our analysis reveals that AAK AB (publ.) pays Johan Westman north of the industry median. Moreover, Johan Westman also holds kr15m worth of AAK AB (publ.) stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	kr11m	kr11m	40%
Other	kr17m	kr18m	60%
Total Compensation	kr28m	kr29m	100%

On an industry level, roughly 40% of total compensation represents salary and 60% is other remuneration. AAK AB (publ.) is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at AAK AB (publ.)'s Growth Numbers

AAK AB (publ.) has seen its earnings per share (EPS) increase by 26% a year over the past three years. Its revenue is down 13% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 AAK AB (publ.) Been A Good Investment?

Most shareholders would probably be pleased with AAK AB (publ.) for providing a total return of 50% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

Shareholders may want to check for free if AAK AB (publ.) insiders are buying or selling shares.

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.