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Is Cavotec SA's (STO:CCC) CEO Being Overpaid?

Simply Wall St

Mikael Norin became the CEO of Cavotec SA (STO:CCC) in 2017. 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Cavotec

How Does Mikael Norin's Compensation Compare With Similar Sized Companies?

Our data indicates that Cavotec SA is worth kr1.9b, and total annual CEO compensation was reported as €1.0m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at €600k. We looked at a group of companies with market capitalizations from €90m to €360m, and the median CEO total compensation was €345k.

As you can see, Mikael Norin is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Cavotec SA 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 Cavotec has changed over time.

OM:CCC CEO Compensation, January 15th 2020

Is Cavotec SA Growing?

Cavotec SA has reduced its earnings per share by an average of 53% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 3.8%.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Cavotec SA Been A Good Investment?

Cavotec SA has generated a total shareholder return of 3.2% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared total CEO remuneration at Cavotec SA with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. And shareholder returns are decent but not great. So we doubt many shareholders would consider the CEO pay to be particularly modest! Whatever your view on compensation, you might want to check if insiders are buying or selling Cavotec shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.