Rottneros AB (publ)'s (STO:RROS) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Rottneros' Annual General Meeting to take place on 10th of April
• CEO Lennart Eberleh's total compensation includes salary of kr3.70m
• The total compensation is similar to the average for the industry
• Over the past three years, Rottneros' EPS fell by 53% and over the past three years, the total loss to shareholders 37%

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Rottneros AB (publ) (STO:RROS) has not performed well recently and CEO Lennart Eberleh will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 10th of April. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Rottneros

How Does Total Compensation For Lennart Eberleh Compare With Other Companies In The Industry?

Our data indicates that Rottneros AB (publ) has a market capitalization of kr891m, and total annual CEO compensation was reported as kr5.6m for the year to December 2024. We note that's a small decrease of 6.7% on last year. Notably, the salary which is kr3.70m, represents most of the total compensation being paid.

For comparison, other companies in the Sweden Forestry industry with market capitalizations below kr2.0b, reported a median total CEO compensation of kr5.6m. From this we gather that Lennart Eberleh is paid around the median for CEOs in the industry. What's more, Lennart Eberleh holds kr1.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. Our data reveals that Rottneros allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Rottneros AB (publ)'s Growth Numbers

Rottneros AB (publ) has reduced its earnings per share by 53% a year over the last three years. In the last year, its revenue is down 1.6%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Rottneros AB (publ) Been A Good Investment?

With a total shareholder return of -37% over three years, Rottneros AB (publ) shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Rottneros (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Rottneros is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.