Most Shareholders Will Probably Find That The CEO Compensation For Ambea AB (publ) (STO:AMBEA) Is Reasonable

Key Insights

• Ambea to hold its Annual General Meeting on 15th of May
• Total pay for CEO Mark Jensen includes kr6.42m salary
• Total compensation is similar to the industry average
• Ambea's total shareholder return over the past three years was 12% while its EPS grew by 15% over the past three years

Under the guidance of CEO Mark Jensen, Ambea AB (publ) (STO:AMBEA) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 15th of May. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Ambea

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

At the time of writing, our data shows that Ambea AB (publ) has a market capitalization of kr6.1b, and reported total annual CEO compensation of kr12m for the year to December 2023. Notably, that's an increase of 12% over the year before. We note that the salary of kr6.42m makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the Swedish Healthcare industry with market capitalizations ranging between kr2.2b and kr8.7b had a median total CEO compensation of kr9.9m. This suggests that Ambea remunerates its CEO largely in line with the industry average. Furthermore, Mark Jensen directly owns kr8.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	kr6.4m	kr6.2m	54%
Other	kr5.5m	kr4.4m	46%
Total Compensation	kr12m	kr11m	100%

Talking in terms of the industry, salary represented approximately 54% of total compensation out of all the companies we analyzed, while other remuneration made up 46% of the pie. Although there is a difference in how total compensation is set, Ambea more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Ambea AB (publ)'s Growth

Over the past three years, Ambea AB (publ) has seen its earnings per share (EPS) grow by 15% per year. In the last year, its revenue is up 6.0%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Ambea AB (publ) Been A Good Investment?

Ambea AB (publ) has served shareholders reasonably well, with a total return of 12% 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...

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. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Ambea (1 shouldn't be ignored!) that you should be aware of before investing here.

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.