Meko AB (publ)'s (STO:MEKO) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Meko to hold its Annual General Meeting on 15th of May
• Salary of kr6.92m is part of CEO Pehr Oscarson's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Meko's EPS fell by 8.8% and over the past three years, the total shareholder return was 14%

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Despite positive share price growth of 14% for Meko AB (publ) (STO:MEKO) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 15th of May. 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 the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Meko

How Does Total Compensation For Pehr Oscarson Compare With Other Companies In The Industry?

At the time of writing, our data shows that Meko AB (publ) has a market capitalization of kr6.9b, and reported total annual CEO compensation of kr13m for the year to December 2024. This means that the compensation hasn't changed much from last year. Notably, the salary which is kr6.92m, represents a considerable chunk of the total compensation being paid.

On examining similar-sized companies in the Sweden Retail Distributors industry with market capitalizations between kr3.9b and kr16b, we discovered that the median CEO total compensation of that group was kr11m. This suggests that Meko remunerates its CEO largely in line with the industry average. Moreover, Pehr Oscarson also holds kr58m worth of Meko stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. Meko is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

Meko AB (publ)'s Growth

Meko AB (publ) has reduced its earnings per share by 8.8% a year over the last three years. Its revenue is up 7.4% over the last year.

Few shareholders would be pleased to read that EPS have declined. 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 Meko AB (publ) Been A Good Investment?

With a total shareholder return of 14% over three years, Meko AB (publ) shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns 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 2 warning signs for Meko that investors should look into moving forward.

Important note: Meko is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.