This article will reflect on the compensation paid to Anders Birgersson who has served as CEO of VBG Group AB (publ) (STO:VBG B) since 2001. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for VBG Group
Comparing VBG Group AB (publ)'s CEO Compensation With the industry
According to our data, VBG Group AB (publ) has a market capitalization of kr3.9b, and paid its CEO total annual compensation worth kr7.1m over the year to December 2019. That is, the compensation was roughly the same as last year. Notably, the salary which is kr3.92m, represents most of the total compensation being paid.
On examining similar-sized companies in the industry with market capitalizations between kr1.7b and kr6.7b, we discovered that the median CEO total compensation of that group was kr7.8m. From this we gather that Anders Birgersson is paid around the median for CEOs in the industry.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | kr3.9m | kr3.8m | 56% |
| Other | kr3.1m | kr3.3m | 44% |
| Total Compensation | kr7.1m | kr7.1m | 100% |
On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. There isn't a significant difference between VBG Group and the broader market, in terms of salary allocation in the overall compensation package. 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.
A Look at VBG Group AB (publ)'s Growth Numbers
Over the last three years, VBG Group AB (publ) has shrunk its earnings per share by 2.7% per year. It saw its revenue drop 14% over the last year.
The lack of EPS growth is certainly unimpressive. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has VBG Group AB (publ) Been A Good Investment?
VBG Group AB (publ) has generated a total shareholder return of 23% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
As we noted earlier, VBG Group pays its CEO in line with similar-sized companies belonging to the same industry. VBG Group has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. These figures do not go well against CEO compensation, which is more or less equal to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at VBG Group.
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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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About OM:VBG B
VBG Group
Develops, manufactures, markets, and sells various industrial products in Sweden, Germany, rest of the Nordic countries and Europe, North America, Brazil, Australia/New Zealand, China, and internationally.
Flawless balance sheet with proven track record and pays a dividend.
