This Is Why We Think Embracer Group AB (publ)'s (STO:EMBRAC B) CEO Might Get A Pay Rise Approved By Shareholders

The decent performance at Embracer Group AB (publ) (STO:EMBRAC B) recently will please most shareholders as they go into the AGM coming up on 16 September 2021. 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. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

See our latest analysis for Embracer Group

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

At the time of writing, our data shows that Embracer Group AB (publ) has a market capitalization of kr98b, and reported total annual CEO compensation of kr1.5m for the year to March 2021. We note that's an increase of 25% above last year. In particular, the salary of kr1.00m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies in the industry with market capitalizations above kr69b, we found that the median total CEO compensation was kr47m. This suggests that Lars Wingefors is paid below the industry median.

On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. There isn't a significant difference between Embracer Group and the broader market, in terms of salary allocation in the overall compensation package. 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.

A Look at Embracer Group AB (publ)'s Growth Numbers

Over the last three years, Embracer Group AB (publ) has shrunk its earnings per share by 31% per year. It achieved revenue growth of 69% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Embracer Group AB (publ) Been A Good Investment?

Most shareholders would probably be pleased with Embracer Group AB (publ) for providing a total return of 194% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some 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. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 2 warning signs for Embracer Group that you should be aware of before investing.

Switching gears from Embracer Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.
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