Shareholders Will Probably Hold Off On Increasing SenzaGen AB's (STO:SENZA) CEO Compensation For The Time Being

Key Insights

• SenzaGen to hold its Annual General Meeting on 15th of May
• CEO Peter Nahlstedt's total compensation includes salary of kr2.15m
• The overall pay is comparable to the industry average
• SenzaGen's three-year loss to shareholders was 34% while its EPS grew by 13% over the past three years

The underwhelming share price performance of SenzaGen AB (STO:SENZA) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 15th of May. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for SenzaGen

Comparing SenzaGen AB's CEO Compensation With The Industry

Our data indicates that SenzaGen AB has a market capitalization of kr230m, and total annual CEO compensation was reported as kr3.0m for the year to December 2023. We note that's an increase of 16% above last year. Notably, the salary which is kr2.15m, represents most of the total compensation being paid.

For comparison, other companies in the Swedish Biotechs industry with market capitalizations below kr2.2b, reported a median total CEO compensation of kr3.7m. From this we gather that Peter Nahlstedt is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	kr2.1m	kr2.1m	71%
Other	kr861k	kr495k	29%
Total Compensation	kr3.0m	kr2.6m	100%

Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. It's interesting to note that SenzaGen pays out a greater portion of remuneration through salary, compared to the industry. 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.

SenzaGen AB's Growth

SenzaGen AB has seen its earnings per share (EPS) increase by 13% a year over the past three years. It achieved revenue growth of 19% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 SenzaGen AB Been A Good Investment?

The return of -34% over three years would not have pleased SenzaGen AB shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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. We did our research and spotted 4 warning signs for SenzaGen that investors should look into moving forward.

Switching gears from SenzaGen, 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.