In 2010 Magnus Welander was appointed CEO of Thule Group AB (publ) (STO:THULE). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Magnus Welander’s Compensation Compare With Similar Sized Companies?
According to our data, Thule Group AB (publ) has a market capitalization of kr16b, and paid its CEO total annual compensation worth kr11m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at kr7.1m. We examined companies with market caps from kr10b to kr33b, and discovered that the median CEO total compensation of that group was kr8.4m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it’s no different in the case of Thule Group. On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. Our data reveals that Thule Group allocates salary in line with the wider market.
As you can see, Magnus Welander is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Thule Group AB (publ) is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see a visual representation of the CEO compensation at Thule Group, below.
Is Thule Group AB (publ) Growing?
Thule Group AB (publ) has increased its earnings per share (EPS) by an average of 9.8% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 8.5%.
I would argue that the improvement in revenue isn’t particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.
Has Thule Group AB (publ) Been A Good Investment?
With a total shareholder return of 17% over three years, Thule Group AB (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.
We compared the total CEO remuneration paid by Thule Group AB (publ), and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. So it’s certainly hard to argue that the CEO is modestly paid, although we don’t see the remuneration as an issue. Moving away from CEO compensation for the moment, we’ve identified 3 warning signs for Thule Group that you should be aware of before investing.
Important note: Thule Group 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.
If you spot an error that warrants correction, please contact the editor at email@example.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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