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Should You Worry About Atlas Copco AB's (STO:ATCO A) CEO Salary Level?

Simply Wall St

Mats Rahmström has been the CEO of Atlas Copco AB (STO:ATCO A) since 2017. First, this article will compare CEO compensation with compensation at other large companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Atlas Copco

How Does Mats Rahmström's Compensation Compare With Similar Sized Companies?

According to our data, Atlas Copco AB has a market capitalization of kr415b, and paid its CEO total annual compensation worth kr17m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at kr13m. When we examined a group of companies with market caps over kr77b, we found that their median CEO total compensation was kr18m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

So Mats Rahmström is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

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

OM:ATCO A CEO Compensation, November 5th 2019

Is Atlas Copco AB Growing?

Atlas Copco AB has increased its earnings per share (EPS) by an average of 12% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 9.8%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has Atlas Copco AB Been A Good Investment?

I think that the total shareholder return of 93%, over three years, would leave most Atlas Copco AB shareholders smiling. 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...

Mats Rahmström is paid around the same as most CEOs of large companies.

The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying Atlas Copco shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.