Here's Why Shareholders May Want To Be Cautious With Increasing Nanologica AB (publ)'s (STO:NICA) CEO Pay Packet

Key Insights

• Nanologica's Annual General Meeting to take place on 22nd of May
• Total pay for CEO Andreas Bhagwani includes kr1.95m salary
• The overall pay is comparable to the industry average
• Nanologica's three-year loss to shareholders was 92% while its EPS grew by 7.4% over the past three years

We've discovered 6 warning signs about Nanologica. View them for free.

In the past three years, the share price of Nanologica AB (publ) (STO:NICA) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 22nd of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Nanologica

How Does Total Compensation For Andreas Bhagwani Compare With Other Companies In The Industry?

Our data indicates that Nanologica AB (publ) has a market capitalization of kr101m, and total annual CEO compensation was reported as kr2.4m for the year to December 2024. That's a notable decrease of 11% on last year. In particular, the salary of kr1.95m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Swedish Biotechs industry with market capitalizations under kr1.9b, the reported median total CEO compensation was kr2.7m. From this we gather that Andreas Bhagwani is paid around the median for CEOs in the industry.

Component	2024	2023	Proportion (2024)
Salary	kr1.9m	kr1.8m	82%
Other	kr424k	kr867k	18%
Total Compensation	kr2.4m	kr2.7m	100%

Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. According to our research, Nanologica has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

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

Nanologica AB (publ)'s earnings per share (EPS) grew 7.4% per year over the last three years. In the last year, its revenue is up 155%.

It's hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. 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 Nanologica AB (publ) Been A Good Investment?

With a total shareholder return of -92% over three years, Nanologica AB (publ) shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 6 warning signs for Nanologica (of which 3 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Nanologica, 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.