Shareholders Will Probably Not Have Any Issues With Nyfosa AB (publ)'s (STO:NYF) CEO Compensation

Key Insights

• Nyfosa will host its Annual General Meeting on 23rd of April
• Total pay for CEO Stina Hök includes kr4.10m salary
• The overall pay is comparable to the industry average
• Nyfosa's EPS declined by 57% over the past three years while total shareholder return over the past three years was 6.3%

Despite Nyfosa AB (publ)'s (STO:NYF) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. The upcoming AGM on 23rd of April may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Nyfosa

How Does Total Compensation For Stina Hök Compare With Other Companies In The Industry?

At the time of writing, our data shows that Nyfosa AB (publ) has a market capitalization of kr18b, and reported total annual CEO compensation of kr7.5m for the year to December 2023. That's a modest increase of 5.6% on the prior year. Notably, the salary which is kr4.10m, represents a considerable chunk of the total compensation being paid.

On comparing similar companies from the Swedish Real Estate industry with market caps ranging from kr11b to kr35b, we found that the median CEO total compensation was kr7.5m. This suggests that Nyfosa remunerates its CEO largely in line with the industry average. Furthermore, Stina Hök directly owns kr9.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	kr4.1m	kr4.0m	55%
Other	kr3.4m	kr3.1m	45%
Total Compensation	kr7.5m	kr7.1m	100%

Talking in terms of the industry, salary represented approximately 75% of total compensation out of all the companies we analyzed, while other remuneration made up 25% of the pie. Nyfosa pays a modest slice of remuneration through salary, as compared to the broader 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.

Nyfosa AB (publ)'s Growth

Over the last three years, Nyfosa AB (publ) has shrunk its earnings per share by 57% per year. Its revenue is up 9.7% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Nyfosa AB (publ) Been A Good Investment?

Nyfosa AB (publ) has generated a total shareholder return of 6.3% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which shouldn't be ignored) in Nyfosa we think you should know about.

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.