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Is Knowit AB (publ) (STO:KNOW) Overpaying Its CEO?

Simply Wall St

Per Wallentin became the CEO of Knowit AB (publ) (STO:KNOW) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. 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 process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Knowit

How Does Per Wallentin's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Knowit AB (publ) has a market cap of kr3.6b, and reported total annual CEO compensation of kr10m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at kr5.8m. When we examined a selection of companies with market caps ranging from kr1.9b to kr7.6b, we found the median CEO total compensation was kr4.6m.

It would therefore appear that Knowit AB (publ) pays Per Wallentin more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

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

OM:KNOW CEO Compensation, December 4th 2019

Is Knowit AB (publ) Growing?

Over the last three years Knowit AB (publ) has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). In the last year, its revenue is up 9.7%.

This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.

Has Knowit AB (publ) Been A Good Investment?

Boasting a total shareholder return of 126% over three years, Knowit AB (publ) has done well by shareholders. 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...

We examined the amount Knowit AB (publ) pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Knowit insiders are buying or selling shares.

Important note: Knowit 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.