Is Bufab AB (publ) (STO:BUFAB) Overpaying Its CEO?

In 2012 Jörgen Rosengren was appointed CEO of Bufab AB (publ) (STO:BUFAB). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Bufab

How Does Jörgen Rosengren's Compensation Compare With Similar Sized Companies?

According to our data, Bufab AB (publ) has a market capitalization of kr3.9b, and paid its CEO total annual compensation worth kr7.0m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at kr4.0m. We examined companies with market caps from kr1.9b to kr7.8b, and discovered that the median CEO total compensation of that group was kr5.1m.

Thus we can conclude that Jörgen Rosengren receives more in total compensation than the median of a group of companies in the same market, and of similar size to Bufab AB (publ). However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. It could be important to check this free visual depiction of what analysts expect for the future.

You can see a visual representation of the CEO compensation at Bufab, below.

Is Bufab AB (publ) Growing?

On average over the last three years, Bufab AB (publ) has grown earnings per share (EPS) by 20% each year (using a line of best fit). In the last year, its revenue is up 16%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.

Has Bufab AB (publ) Been A Good Investment?

Boasting a total shareholder return of 67% over three years, Bufab AB (publ) has done well by shareholders. 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.

In Summary...

We compared the total CEO remuneration paid by Bufab AB (publ), and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Bufab shares (free trial).

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.

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.

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. Thank you for reading.