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Is AddLife AB (publ)'s (STO:ALIF B) CEO Salary Justified?

Simply Wall St

Kristina Willgård became the CEO of AddLife AB (publ) (STO:ALIF B) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for AddLife

How Does Kristina Willgård's Compensation Compare With Similar Sized Companies?

Our data indicates that AddLife AB (publ) is worth kr9.6b, and total annual CEO compensation was reported as kr6.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at kr4.6m. When we examined a selection of companies with market caps ranging from kr3.9b to kr16b, we found the median CEO total compensation was kr5.9m.

That means Kristina Willgård receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at AddLife has changed over time.

OM:ALIF B CEO Compensation, February 20th 2020

Is AddLife AB (publ) Growing?

AddLife AB (publ) has increased its earnings per share (EPS) by an average of 1.9% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 40%.

It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. I'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has AddLife AB (publ) Been A Good Investment?

I think that the total shareholder return of 117%, over three years, would leave most AddLife AB (publ) shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Kristina Willgård is paid around what is normal the leaders of comparable size companies.

While the growth could be better, the shareholder returns are clearly good. So we can conclude that on this analysis the CEO compensation seems pretty sound. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at AddLife.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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