How Much Is Edgeware AB (publ) (STO:EDGE) Paying Its CEO?

Karl Thedéen has been the CEO of Edgeware AB (publ) (STO:EDGE) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Edgeware

How Does Total Compensation For Karl Thedéen Compare With Other Companies In The Industry?

According to our data, Edgeware AB (publ) has a market capitalization of kr233m, and paid its CEO total annual compensation worth kr5.5m over the year to December 2019. Notably, that's an increase of 62% over the year before. In particular, the salary of kr2.90m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under kr1.8b, the reported median total CEO compensation was kr1.5m. Hence, we can conclude that Karl Thedéen is remunerated higher than the industry median.

On an industry level, around 71% of total compensation represents salary and 29% is other remuneration. Edgeware sets aside a smaller share of compensation for 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.

Edgeware AB (publ)'s Growth

Edgeware AB (publ) has reduced its earnings per share by 87% a year over the last three years. In the last year, its revenue is down 17%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Edgeware AB (publ) Been A Good Investment?

With a three year total loss of 78% for the shareholders, Edgeware AB (publ) would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Edgeware pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Edgeware that investors should look into moving forward.

Important note: Edgeware 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. 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.
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