Shareholders Will Probably Hold Off On Increasing 24SevenOffice Group AB (publ)'s (NGM:247) CEO Compensation For The Time Being

Key Insights

• 24SevenOffice Group will host its Annual General Meeting on 15th of May
• Total pay for CEO Eirik Stranden includes kr2.38m salary
• The overall pay is comparable to the industry average
• 24SevenOffice Group's three-year loss to shareholders was 50% while its EPS was down 43% over the past three years

In the past three years, the share price of 24SevenOffice Group AB (publ) (NGM:247) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 15th of May and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for 24SevenOffice Group

Comparing 24SevenOffice Group AB (publ)'s CEO Compensation With The Industry

At the time of writing, our data shows that 24SevenOffice Group AB (publ) has a market capitalization of kr1.1b, and reported total annual CEO compensation of kr2.5m for the year to December 2023. Notably, that's an increase of 26% over the year before. Notably, the salary which is kr2.38m, represents most of the total compensation being paid.

On comparing similar-sized companies in the Swedish Software industry with market capitalizations below kr2.2b, we found that the median total CEO compensation was kr2.2m. From this we gather that Eirik Stranden is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	kr2.4m	kr1.9m	94%
Other	kr154k	kr137k	6%
Total Compensation	kr2.5m	kr2.0m	100%

On an industry level, around 68% of total compensation represents salary and 32% is other remuneration. 24SevenOffice Group pays out 94% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

24SevenOffice Group AB (publ)'s Growth

Over the last three years, 24SevenOffice Group AB (publ) has shrunk its earnings per share by 43% per year. In the last year, its revenue is up 30%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has 24SevenOffice Group AB (publ) Been A Good Investment?

The return of -50% over three years would not have pleased 24SevenOffice Group AB (publ) shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM 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 compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for 24SevenOffice Group you should be aware of, and 1 of them is significant.

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.