In 2015 Alrik Danielson was appointed CEO of AB SKF (publ) (STO:SKF B). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Alrik Danielson's Compensation Compare With Similar Sized Companies?
Our data indicates that AB SKF (publ) is worth kr72b, and total annual CEO compensation was reported as kr19m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at kr13m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of kr40b to kr119b. The median total CEO compensation was kr15m.
As you can see, Alrik Danielson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean AB SKF (publ) is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at AB SKF has changed over time.
Is AB SKF (publ) Growing?
Over the last three years AB SKF (publ) has grown its earnings per share (EPS) by an average of 28% per year (using a line of best fit). It achieved revenue growth of 6.2% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has AB SKF (publ) Been A Good Investment?
AB SKF (publ) has served shareholders reasonably well, with a total return of 20% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount AB SKF (publ) pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at AB SKF.
If you want to buy a stock that is better than AB SKF, this free list of high return, low debt companies is a great place to look.
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