Mattias Perjos became the CEO of Getinge AB (STO:GETI B) in 2017. 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 Mattias Perjos's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Getinge AB has a market cap of kr37b, and is paying total annual CEO compensation of kr34m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr21m. When we examined a selection of companies with market caps ranging from kr19b to kr62b, we found the median CEO total compensation was kr9.1m.
It would therefore appear that Getinge AB pays Mattias Perjos 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.
The graphic below shows how CEO compensation at Getinge has changed from year to year.
Is Getinge AB Growing?
On average over the last three years, Getinge AB has shrunk earnings per share by 86% each year (measured with a line of best fit). In the last year, its revenue is up 11%.
Unfortunately, earnings per share have trended lower over the last three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. 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 Getinge AB Been A Good Investment?
With a total shareholder return of 4.2% over three years, Getinge AB has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Getinge AB, and compared it to remuneration at a group of similar sized companies. 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.
While shareholder returns are acceptable, they don't delight. So we think more research is needed, but we don't think the CEO underpaid. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Getinge.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.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.