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Is Peab AB (publ)'s (STO:PEAB B) CEO Overpaid Relative To Its Peers?

Simply Wall St

The CEO of Peab AB (publ) (STO:PEAB B) is Jesper Göransson. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Peab

How Does Jesper Göransson's Compensation Compare With Similar Sized Companies?

Our data indicates that Peab AB (publ) is worth kr24b, and total annual CEO compensation was reported as kr15m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr7.2m. We looked at a group of companies with market capitalizations from kr19b to kr62b, and the median CEO total compensation was kr8.7m.

As you can see, Jesper Göransson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Peab AB (publ) is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Peab has changed from year to year.

OM:PEAB B CEO Compensation, November 8th 2019

Is Peab AB (publ) Growing?

Peab AB (publ) has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 3.2%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.

Has Peab AB (publ) Been A Good Investment?

Peab AB (publ) has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We compared total CEO remuneration at Peab 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.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven't been bad. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. Whatever your view on compensation, you might want to check if insiders are buying or selling Peab shares (free trial).

If you want to buy a stock that is better than Peab, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.