Shareholders May Be Wary Of Increasing Hansa Biopharma AB (publ)'s (STO:HNSA) CEO Compensation Package

Key Insights

• Hansa Biopharma's Annual General Meeting to take place on 27th of June
• Salary of kr8.43m is part of CEO Søren Tulstrup's total remuneration
• Total compensation is 441% above industry average
• Hansa Biopharma's three-year loss to shareholders was 70% while its EPS was down 16% over the past three years

Hansa Biopharma AB (publ) (STO:HNSA) has not performed well recently and CEO Søren Tulstrup 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 27th of June. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Hansa Biopharma

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

Our data indicates that Hansa Biopharma AB (publ) has a market capitalization of kr2.7b, and total annual CEO compensation was reported as kr28m for the year to December 2023. That's a fairly small increase of 3.9% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at kr8.4m.

In comparison with other companies in the Swedish Biotechs industry with market capitalizations ranging from kr1.0b to kr4.2b, the reported median CEO total compensation was kr5.1m. Hence, we can conclude that Søren Tulstrup is remunerated higher than the industry median. Moreover, Søren Tulstrup also holds kr1.3m worth of Hansa Biopharma stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	kr8.4m	kr7.6m	31%
Other	kr19m	kr19m	69%
Total Compensation	kr28m	kr26m	100%

On an industry level, around 58% of total compensation represents salary and 42% is other remuneration. Hansa Biopharma pays a modest slice of remuneration through salary, as compared 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 Hansa Biopharma AB (publ)'s Growth Numbers

Hansa Biopharma AB (publ) has reduced its earnings per share by 16% a year over the last three years. In the last year, its revenue is up 12%.

Few shareholders would be pleased to read that EPS have declined. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Hansa Biopharma AB (publ) Been A Good Investment?

With a total shareholder return of -70% over three years, Hansa Biopharma AB (publ) shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for Hansa Biopharma (1 shouldn't be ignored!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com