Here's Why BioArctic AB (publ)'s (STO:BIOA B) CEO Compensation Is The Least Of Shareholders Concerns

Key Insights

• BioArctic will host its Annual General Meeting on 22nd of May
• CEO Gunilla Osswald's total compensation includes salary of kr4.74m
• The overall pay is 44% below the industry average
• BioArctic's EPS declined by 8.5% over the past three years while total shareholder return over the past three years was 117%

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The performance at BioArctic AB (publ) (STO:BIOA B) has been rather lacklustre of late and shareholders may be wondering what CEO Gunilla Osswald is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 22nd of May. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for BioArctic

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

Our data indicates that BioArctic AB (publ) has a market capitalization of kr16b, and total annual CEO compensation was reported as kr9.8m for the year to December 2024. That's a notable decrease of 56% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at kr4.7m.

On examining similar-sized companies in the Swedish Biotechs industry with market capitalizations between kr9.7b and kr31b, we discovered that the median CEO total compensation of that group was kr17m. In other words, BioArctic pays its CEO lower than the industry median.

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. In BioArctic's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

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

Over the last three years, BioArctic AB (publ) has shrunk its earnings per share by 8.5% per year. Its revenue is down 58% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. 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 BioArctic AB (publ) Been A Good Investment?

We think that the total shareholder return of 117%, over three years, would leave most BioArctic AB (publ) shareholders smiling. 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...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

Shareholders may want to check for free if BioArctic insiders are buying or selling shares.

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.