We Think Some Shareholders May Hesitate To Increase Proact IT Group AB (publ)'s (STO:PACT) CEO Compensation

Key Insights

• Proact IT Group will host its Annual General Meeting on 7th of May
• CEO Jonas Hasselberg's total compensation includes salary of kr4.41m
• The total compensation is 31% higher than the average for the industry
• Proact IT Group's EPS grew by 9.7% over the past three years while total shareholder return over the past three years was 34%

CEO Jonas Hasselberg has done a decent job of delivering relatively good performance at Proact IT Group AB (publ) (STO:PACT) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 7th of May. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Proact IT Group

How Does Total Compensation For Jonas Hasselberg Compare With Other Companies In The Industry?

At the time of writing, our data shows that Proact IT Group AB (publ) has a market capitalization of kr2.9b, and reported total annual CEO compensation of kr7.4m for the year to December 2023. That's a modest increase of 5.2% on the prior year. Notably, the salary which is kr4.41m, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Swedish IT industry with market capitalizations ranging between kr1.1b and kr4.4b had a median total CEO compensation of kr5.7m. Hence, we can conclude that Jonas Hasselberg is remunerated higher than the industry median. Furthermore, Jonas Hasselberg directly owns kr3.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	kr4.4m	kr4.2m	60%
Other	kr3.0m	kr2.8m	40%
Total Compensation	kr7.4m	kr7.0m	100%

On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. Although there is a difference in how total compensation is set, Proact IT Group more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Proact IT Group AB (publ)'s Growth Numbers

Over the past three years, Proact IT Group AB (publ) has seen its earnings per share (EPS) grow by 9.7% per year. It achieved revenue growth of 1.9% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Proact IT Group AB (publ) Been A Good Investment?

Boasting a total shareholder return of 34% over three years, Proact IT Group AB (publ) has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Proact IT Group that investors should look into moving forward.

Switching gears from Proact IT 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.