Is Fingerprint Cards AB (publ) (STO:FING B) Overpaying Its CEO?

Christian Fredrikson has been the CEO of Fingerprint Cards AB (publ) (STO:FING B) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

See our latest analysis for Fingerprint Cards

How Does Christian Fredrikson’s Compensation Compare With Similar Sized Companies?

Our data indicates that Fingerprint Cards AB (publ) is worth kr5.1b, and total annual CEO compensation was reported as kr8.9m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at kr5.6m. We looked at a group of companies with market capitalizations from kr1.9b to kr7.5b, and the median CEO total compensation was kr5.4m.

It would therefore appear that Fingerprint Cards AB (publ) pays Christian Fredrikson more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Fingerprint Cards has changed over time.

OM:FING B CEO Compensation, December 20th 2019
OM:FING B CEO Compensation, December 20th 2019

Is Fingerprint Cards AB (publ) Growing?

Fingerprint Cards AB (publ) has reduced its earnings per share by an average of 113% a year, over the last three years (measured with a line of best fit). It saw its revenue drop 13% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Fingerprint Cards AB (publ) Been A Good Investment?

Given the total loss of 76% over three years, many shareholders in Fingerprint Cards 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…

We examined the amount Fingerprint Cards AB (publ) pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Fingerprint Cards.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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. Thank you for reading.