How Is Cavotec's (STO:CCC) CEO Paid Relative To Peers?

Mikael Norin became the CEO of Cavotec SA (STO:CCC) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Cavotec pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Cavotec

Comparing Cavotec SA's CEO Compensation With the industry

Our data indicates that Cavotec SA has a market capitalization of kr2.0b, and total annual CEO compensation was reported as €949k for the year to December 2019. We note that's a decrease of 9.5% compared to last year. We note that the salary portion, which stands at €701.8k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between kr826m and kr3.3b had a median total CEO compensation of €449k. Accordingly, our analysis reveals that Cavotec SA pays Mikael Norin north of the industry median. Moreover, Mikael Norin also holds kr4.3m worth of Cavotec stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. It's interesting to note that Cavotec pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Cavotec SA's Growth

Cavotec SA has seen its earnings per share (EPS) increase by 80% a year over the past three years. Its revenue is down 16% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Cavotec SA Been A Good Investment?

Since shareholders would have lost about 2.5% over three years, some Cavotec SA investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Mikael is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Considering overall performance, we can't say Mikael is underpaid, in fact compensation is definitely on the higher side.

Shareholders may want to check for free if Cavotec insiders are buying or selling shares.

Important note: Cavotec is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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