Jörgen Rosengren became the CEO of Bufab AB (publ) (STO:BUFAB) in 2012. 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.
How Does Jörgen Rosengren's Compensation Compare With Similar Sized Companies?
According to our data, Bufab AB (publ) has a market capitalization of kr3.9b, and paid its CEO total annual compensation worth kr7.0m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr4.0m. We examined companies with market caps from kr1.9b to kr7.5b, and discovered that the median CEO total compensation of that group was kr5.2m.
As you can see, Jörgen Rosengren is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Bufab AB (publ) is paying too much. 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 a visual representation of the CEO compensation at Bufab, below.
Is Bufab AB (publ) Growing?
On average over the last three years, Bufab AB (publ) has grown earnings per share (EPS) by 18% each year (using a line of best fit). Its revenue is up 15% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Bufab AB (publ) Been A Good Investment?
Bufab AB (publ) has generated a total shareholder return of 20% 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.
We compared the total CEO remuneration paid by Bufab AB (publ), and compared it to remuneration at a group of 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. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Bufab (free visualization of insider trades).
Important note: Bufab 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.
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