We Think Desenio Group AB (publ)'s (STO:DSNO) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Desenio Group's Annual General Meeting to take place on 29th of May
• CEO Fredrik Palm's total compensation includes salary of kr2.70m
• The total compensation is similar to the average for the industry
• Desenio Group's EPS declined by 140% over the past three years while total shareholder loss over the past three years was 100%

Desenio Group AB (publ) (STO:DSNO) has not performed well recently and CEO Fredrik Palm 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 29th of May. 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. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Desenio Group

How Does Total Compensation For Fredrik Palm Compare With Other Companies In The Industry?

According to our data, Desenio Group AB (publ) has a market capitalization of kr52m, and paid its CEO total annual compensation worth kr3.8m over the year to December 2023. Notably, that's an increase of 12% over the year before. Notably, the salary which is kr2.70m, represents most of the total compensation being paid.

For comparison, other companies in the Swedish Specialty Retail industry with market capitalizations below kr2.1b, reported a median total CEO compensation of kr3.8m. This suggests that Desenio Group remunerates its CEO largely in line with the industry average. Moreover, Fredrik Palm also holds kr3.4m worth of Desenio Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	kr2.7m	kr2.6m	71%
Other	kr1.1m	kr800k	29%
Total Compensation	kr3.8m	kr3.4m	100%

On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. Desenio Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Desenio Group AB (publ)'s Growth

Over the last three years, Desenio Group AB (publ) has shrunk its earnings per share by 140% per year. In the last year, its revenue changed by just 0.2%.

Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Desenio Group AB (publ) Been A Good Investment?

The return of -100% over three years would not have pleased Desenio Group AB (publ) shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Desenio Group that investors should think about before committing capital to this stock.

Switching gears from Desenio Group, 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.