Most Shareholders Will Probably Agree With Embracer Group AB (publ)'s (STO:EMBRAC B) CEO Compensation

Simply Wall St · 09/15/2023 04:01

Key Insights

  • Embracer Group will host its Annual General Meeting on 21st of September
  • Salary of kr1.00m is part of CEO Lars Wingefors's total remuneration
  • The total compensation is 93% less than the average for the industry
  • Embracer Group's three-year loss to shareholders was 68% while its EPS grew by 118% over the past three years

Shareholders may be wondering what CEO Lars Wingefors plans to do to improve the less than great performance at Embracer Group AB (publ) (STO:EMBRAC B) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 21st of September. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Embracer Group

Comparing Embracer Group AB (publ)'s CEO Compensation With The Industry

According to our data, Embracer Group AB (publ) has a market capitalization of kr36b, and paid its CEO total annual compensation worth kr1.0m over the year to March 2023. We note that's a decrease of 17% compared to last year. Notably, the salary of kr1.0m is the entirety of the CEO compensation.

On examining similar-sized companies in the Swedish Entertainment industry with market capitalizations between kr22b and kr71b, we discovered that the median CEO total compensation of that group was kr14m. Accordingly, Embracer Group pays its CEO under the industry median.

Component20232022Proportion (2023)
Salary kr1.0m kr1.0m 100%
Other - kr200k -
Total Compensationkr1.0m kr1.2m100%

Talking in terms of the industry, salary represented approximately 71% of total compensation out of all the companies we analyzed, while other remuneration made up 29% of the pie. Speaking on a company level, Embracer Group prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

OM:EMBRAC B CEO Compensation September 15th 2023

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

Over the past three years, Embracer Group AB (publ) has seen its earnings per share (EPS) grow by 118% per year. In the last year, its revenue is up 101%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Embracer Group AB (publ) Been A Good Investment?

With a total shareholder return of -68% over three years, Embracer Group AB (publ) shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Embracer Group pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Embracer Group (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

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.