Alrik Danielson has been the CEO of AB SKF (publ) (STO:SKF B) since 2015. 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 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.
How Does Alrik Danielson’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that AB SKF (publ) has a market cap of kr86b, and reported total annual CEO compensation of kr19m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at kr13m. When we examined a selection of companies with market caps ranging from kr38b to kr114b, we found the median CEO total compensation was kr17m.
That means Alrik Danielson receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at AB SKF has changed from year to year.
Is AB SKF (publ) Growing?
On average over the last three years, AB SKF (publ) has grown earnings per share (EPS) by 23% each year (using a line of best fit). In the last year, its revenue is up 2.4%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.
Has AB SKF (publ) Been A Good Investment?
With a total shareholder return of 23% over three years, AB SKF (publ) shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Alrik Danielson is close enough to the median pay for a CEO of a similar sized company .
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think the CEO pay is probably quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at AB SKF.
Important note: AB SKF 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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