The CEO of Medicover AB (publ) (STO:MCOV B) is Fredrik Rågmark, and this article examines the executive’s compensation against the backdrop of overall company performance. This analysis will also assess whether Medicover pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Medicover AB (publ)’s CEO Compensation With the industry
At the time of writing, our data shows that Medicover AB (publ) has a market capitalization of kr18b, and reported total annual CEO compensation of €1.3m for the year to December 2019. We note that’s an increase of 17% above last year. In particular, the salary of €900.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from kr8.8b to kr28b, we found that the median CEO total compensation was €767k. This suggests that Fredrik Rågmark is paid more than the median for the industry. What’s more, Fredrik Rågmark holds kr239m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. Our data reveals that Medicover allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.
A Look at Medicover AB (publ)’s Growth Numbers
Over the last three years, Medicover AB (publ) has shrunk its earnings per share by 33% per year. Its revenue is up 17% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..
Has Medicover AB (publ) Been A Good Investment?
We think that the total shareholder return of 105%, over three years, would leave most Medicover AB (publ) shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
As previously discussed, Fredrik is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But shareholder returns and revenue growth have been very healthy as we saw before. Importantly though, EPS has not been growing over the same stretch. All things considered, although EPS growth would’ve been nice, the positive investor returns and revenue growth lead us to believe Fredrik is appropriately paid.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for Medicover (1 is a bit concerning!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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