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

Shareholders will probably not be disappointed by the robust results at Embracer Group AB (publ) (STO:EMBRAC B) recently and they will be keeping this in mind as they go into the AGM on 21 September 2022. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for Embracer Group

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

According to our data, Embracer Group AB (publ) has a market capitalization of kr84b, and paid its CEO total annual compensation worth kr1.2m over the year to March 2022. There was no change in the compensation compared to last year. We note that the salary portion, which stands at kr1.00m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between kr43b and kr128b, we discovered that the median CEO total compensation of that group was kr14m. In other words, Embracer Group pays its CEO lower than the industry median.

Component	2022	2021	Proportion (2022)
Salary	kr1.0m	kr1.0m	83%
Other	kr200k	kr200k	17%
Total Compensation	kr1.2m	kr1.2m	100%

Talking in terms of the industry, salary represented approximately 82% of total compensation out of all the companies we analyzed, while other remuneration made up 18% of the pie. Embracer Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

Embracer Group AB (publ)'s Growth

Over the last three years, Embracer Group AB (publ) has shrunk its earnings per share by 123% per year. It achieved revenue growth of 96% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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?

Boasting a total shareholder return of 69% over three years, Embracer Group AB (publ) has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for 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. We did our research and spotted 1 warning sign for Embracer Group that investors should look into moving forward.

Important note: Embracer Group 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.