Is Bergman & Beving AB (publ) (STO:BERG B) Excessively Paying Its CEO?

Pontus Boman became the CEO of Bergman & Beving AB (publ) (STO:BERG B) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Bergman & Beving

How Does Pontus Boman’s Compensation Compare With Similar Sized Companies?

Our data indicates that Bergman & Beving AB (publ) is worth kr1.8b, and total annual CEO compensation was reported as kr5.4m for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at kr3.8m. When we examined a selection of companies with market caps ranging from kr952m to kr3.8b, we found the median CEO total compensation was kr4.5m.

That means Pontus Boman 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 Bergman & Beving has changed from year to year.

OM:BERG B CEO Compensation, March 12th 2020
OM:BERG B CEO Compensation, March 12th 2020

Is Bergman & Beving AB (publ) Growing?

Bergman & Beving AB (publ) has reduced its earnings per share by an average of 9.7% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 2.0% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Bergman & Beving AB (publ) Been A Good Investment?

Given the total loss of 45% over three years, many shareholders in Bergman & Beving AB (publ) are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Pontus Boman is paid around what is normal for the leaders of comparable size companies.

After looking at EPS and total shareholder returns, it’s certainly hard to argue the company has performed well, since both metrics are down. Few would argue that it’s wise for the company to pay any more, before returns improve. On another note, we’ve spotted 3 warning signs for Bergman & Beving that investors should look into moving forward.

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

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.

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