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Why AcadeMedia AB (publ)'s (STO:ACAD) CEO Pay Matters To You

Simply Wall St

Marcus Strömberg has been the CEO of AcadeMedia AB (publ) (STO:ACAD) since 2005. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for AcadeMedia

How Does Marcus Strömberg's Compensation Compare With Similar Sized Companies?

Our data indicates that AcadeMedia AB (publ) is worth kr5.2b, and total annual CEO compensation was reported as kr9.2m for the year to June 2019. Notably, that's an increase of 28% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr5.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of kr1.9b to kr7.7b. The median total CEO compensation was kr4.8m.

Thus we can conclude that Marcus Strömberg receives more in total compensation than the median of a group of companies in the same market, and of similar size to AcadeMedia 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.

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

OM:ACAD CEO Compensation, October 27th 2019

Is AcadeMedia AB (publ) Growing?

Over the last three years AcadeMedia AB (publ) has shrunk its earnings per share by an average of 5.4% per year (measured with a line of best fit). Its revenue is up 6.8% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has AcadeMedia AB (publ) Been A Good Investment?

Since shareholders would have lost about 11% over three years, some AcadeMedia AB (publ) shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount AcadeMedia AB (publ) pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Arguably worse, investors are without a positive return for the last three years. This contrasts with the growth in CEO remuneration, year on year. Some might well form the view that the CEO is paid too generously! So you may want to check if insiders are buying AcadeMedia shares with their own money (free access).

If you want to buy a stock that is better than AcadeMedia, 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.