Here's Why Shareholders May Want To Be Cautious With Increasing Arise AB (publ)'s (STO:ARISE) CEO Pay Packet

Key Insights

• Arise to hold its Annual General Meeting on 7th of May
• Salary of kr2.90m is part of CEO Per-Erik Eriksson's total remuneration
• The overall pay is 31% above the industry average
• Over the past three years, Arise's EPS grew by 20% and over the past three years, the total loss to shareholders 30%

Our free stock report includes 1 warning sign investors should be aware of before investing in Arise. Read for free now.

In the past three years, the share price of Arise AB (publ) (STO:ARISE) 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. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 7th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Arise

How Does Total Compensation For Per-Erik Eriksson Compare With Other Companies In The Industry?

At the time of writing, our data shows that Arise AB (publ) has a market capitalization of kr1.4b, and reported total annual CEO compensation of kr5.8m for the year to December 2024. We note that's a decrease of 11% compared to last year. 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 Sweden Renewable Energy industry with market capitalizations under kr1.9b, the reported median total CEO compensation was kr4.4m. This suggests that Per-Erik Eriksson is paid more than the median for the industry. Moreover, Per-Erik Eriksson also holds kr689k worth of Arise stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	kr2.9m	kr2.8m	50%
Other	kr2.9m	kr3.7m	50%
Total Compensation	kr5.8m	kr6.5m	100%

Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. Arise is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation.

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

Arise AB (publ) has seen its earnings per share (EPS) increase by 20% a year over the past three years. Its revenue is down 6.6% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Arise AB (publ) Been A Good Investment?

With a total shareholder return of -30% over three years, Arise AB (publ) shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 Arise that investors should look into moving forward.

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.