Shareholders May Be Wary Of Increasing G5 Entertainment AB (publ)'s (STO:G5EN) CEO Compensation Package

Key Insights

• G5 Entertainment to hold its Annual General Meeting on 12th of June
• CEO Vlad Suglobov's total compensation includes salary of kr4.97m
• The overall pay is 99% above the industry average
• G5 Entertainment's EPS declined by 12% over the past three years while total shareholder loss over the past three years was 73%

Shareholders will probably not be too impressed with the underwhelming results at G5 Entertainment AB (publ) (STO:G5EN) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 12th of June. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for G5 Entertainment

Comparing G5 Entertainment AB (publ)'s CEO Compensation With The Industry

Our data indicates that G5 Entertainment AB (publ) has a market capitalization of kr1.1b, and total annual CEO compensation was reported as kr6.2m for the year to December 2023. We note that's an increase of 9.6% above last year. Notably, the salary which is kr4.97m, represents most of the total compensation being paid.

In comparison with other companies in the Swedish Entertainment industry with market capitalizations under kr2.1b, the reported median total CEO compensation was kr3.1m. Hence, we can conclude that Vlad Suglobov is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	kr5.0m	kr5.2m	80%
Other	kr1.3m	kr488k	20%
Total Compensation	kr6.2m	kr5.7m	100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. In G5 Entertainment's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at G5 Entertainment AB (publ)'s Growth Numbers

Over the last three years, G5 Entertainment AB (publ) has shrunk its earnings per share by 12% per year. In the last year, its revenue is down 9.9%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has G5 Entertainment AB (publ) Been A Good Investment?

The return of -73% over three years would not have pleased G5 Entertainment AB (publ) shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for G5 Entertainment that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.