Here's Why Shareholders May Want To Be Cautious With Increasing Net Insight AB (publ)'s (STO:NETI B) CEO Pay Packet

Key Insights

• Net Insight's Annual General Meeting to take place on 14th of May
• Total pay for CEO Crister Fritzson includes kr5.56m salary
• Total compensation is 321% above industry average
• Net Insight's EPS grew by 19% over the past three years while total shareholder loss over the past three years was 31%

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In the past three years, the share price of Net Insight AB (publ) (STO:NETI B) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 14th of May. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Net Insight

How Does Total Compensation For Crister Fritzson Compare With Other Companies In The Industry?

Our data indicates that Net Insight AB (publ) has a market capitalization of kr968m, and total annual CEO compensation was reported as kr11m for the year to December 2024. That's a notable increase of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at kr5.6m.

In comparison with other companies in the Swedish Communications industry with market capitalizations under kr1.9b, the reported median total CEO compensation was kr2.7m. This suggests that Crister Fritzson is paid more than the median for the industry. What's more, Crister Fritzson holds kr1.2m worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 67% of total compensation out of all the companies we analyzed, while other remuneration made up 33% of the pie. It's interesting to note that Net Insight allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Net Insight AB (publ)'s Growth

Net Insight AB (publ)'s earnings per share (EPS) grew 19% per year over the last three years. In the last year, its revenue changed by just 0.9%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Net Insight AB (publ) Been A Good Investment?

The return of -31% over three years would not have pleased Net Insight AB (publ) shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Net Insight that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.