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Is CombiGene AB (publ)'s (STO:COMBI) CEO Being Overpaid?

Simply Wall St

Jan Nilsson became the CEO of CombiGene AB (publ) (STO:COMBI) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for CombiGene

How Does Jan Nilsson's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that CombiGene AB (publ) has a market cap of kr32m, and reported total annual CEO compensation of kr2.8m for the year to December 2018. Notably, the salary of kr2.8m is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below kr1.9b. The median CEO total compensation in that group is kr2.1m.

Thus we can conclude that Jan Nilsson receives more in total compensation than the median of a group of companies in the same market, and of similar size to CombiGene AB (publ). However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at CombiGene, below.

OM:COMBI CEO Compensation, March 1st 2020

Is CombiGene AB (publ) Growing?

On average over the last three years, CombiGene AB (publ) has grown earnings per share (EPS) by 25% each year (using a line of best fit). It achieved revenue growth of 327% over the last year.

This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has CombiGene AB (publ) Been A Good Investment?

With a three year total loss of 85%, CombiGene AB (publ) would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by CombiGene AB (publ), and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Shareholders may want to check for free if CombiGene insiders are buying or selling shares.

Important note: CombiGene may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.

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.