Tom Erixon became the CEO of Alfa Laval AB (publ) (STO:ALFA) in 2016. First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Tom Erixon's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Alfa Laval AB (publ) has a market cap of kr99b, and reported total annual CEO compensation of kr23m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr11m. When we examined a group of companies with market caps over kr78b, we found that their median CEO total compensation was kr18m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
So Tom Erixon receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Alfa Laval has changed over time.
Is Alfa Laval AB (publ) Growing?
Over the last three years Alfa Laval AB (publ) has grown its earnings per share (EPS) by an average of 33% per year (using a line of best fit). It achieved revenue growth of 13% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Alfa Laval AB (publ) Been A Good Investment?
I think that the total shareholder return of 88%, over three years, would leave most Alfa Laval AB (publ) shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Tom Erixon is paid around what is normal the leaders of larger companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying Alfa Laval shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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