Mikael Ericson has been the CEO of Intrum AB (publ) (STO:INTRUM) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Mikael Ericson's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Intrum AB (publ) has a market cap of kr33b, and reported total annual CEO compensation of kr13m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr6.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of kr19b to kr62b. The median total CEO compensation was kr8.3m.
As you can see, Mikael Ericson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Intrum AB (publ) is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Intrum has changed from year to year.
Is Intrum AB (publ) Growing?
Intrum AB (publ) has reduced its earnings per share by an average of 1.4% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 14% over the last year.
Unfortunately there is a complete lack of earnings per share improvement, over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Intrum AB (publ) Been A Good Investment?
Given the total loss of 2.2% over three years, many shareholders in Intrum AB (publ) are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Intrum AB (publ) 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.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Shareholders may want to check for free if Intrum insiders are buying or selling shares.
Important note: Intrum 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.
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