We Think Some Shareholders May Hesitate To Increase Ovzon AB (publ)'s (STO:OVZON) CEO Compensation

Key Insights

• Ovzon will host its Annual General Meeting on 24th of April
• Total pay for CEO Per Noren includes kr5.47m salary
• The overall pay is 61% above the industry average
• Ovzon's EPS grew by 1.2% over the past three years while total shareholder loss over the past three years was 36%

We've discovered 1 warning sign about Ovzon. View them for free.

The underwhelming share price performance of Ovzon AB (publ) (STO:OVZON) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 24th of April could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Ovzon

How Does Total Compensation For Per Noren Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ovzon AB (publ) has a market capitalization of kr3.0b, and reported total annual CEO compensation of kr7.5m for the year to December 2024. That's a notable increase of 37% on last year. Notably, the salary which is kr5.47m, represents most of the total compensation being paid.

On examining similar-sized companies in the Swedish Telecom industry with market capitalizations between kr1.9b and kr7.7b, we discovered that the median CEO total compensation of that group was kr4.7m. Accordingly, our analysis reveals that Ovzon AB (publ) pays Per Noren north of the industry median. Moreover, Per Noren also holds kr4.2m worth of Ovzon stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	kr5.5m	kr5.0m	73%
Other	kr2.1m	kr475k	27%
Total Compensation	kr7.5m	kr5.5m	100%

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. It's interesting to note that Ovzon pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Ovzon AB (publ)'s Growth Numbers

Ovzon AB (publ)'s earnings per share (EPS) grew 1.2% per year over the last three years. Its revenue is up 13% over the last year.

This revenue growth could really point to a brighter future. And, while modest, the EPS growth is noticeable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Ovzon AB (publ) Been A Good Investment?

With a total shareholder return of -36% over three years, Ovzon AB (publ) shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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. At the upcoming AGM, shareholders will get the opportunity to discuss any issues 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. That's why we did some digging and identified 1 warning sign for Ovzon that you should be aware of before investing.

Switching gears from Ovzon, 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.

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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.