How Should Investors Feel About XANO Industri's (STO:XANO B) CEO Remuneration?

This article will reflect on the compensation paid to Lennart Persson who has served as CEO of XANO Industri AB (publ) (STO:XANO B) since 2014. This analysis will also assess whether XANO Industri pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for XANO Industri

Comparing XANO Industri AB (publ)'s CEO Compensation With the industry

According to our data, XANO Industri AB (publ) has a market capitalization of kr3.5b, and paid its CEO total annual compensation worth kr7.8m over the year to December 2019. That's just a smallish increase of 4.4% on last year. We note that the salary portion, which stands at kr4.87m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from kr1.7b to kr6.9b, we found that the median CEO total compensation was kr7.8m. This suggests that XANO Industri remunerates its CEO largely in line with the industry average. What's more, Lennart Persson holds kr11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 56% of total compensation represents salary and 44% is other remuneration. According to our research, XANO Industri has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

XANO Industri AB (publ)'s Growth

XANO Industri AB (publ)'s earnings per share (EPS) grew 9.1% per year over the last three years. Its revenue is down 1.3% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has XANO Industri AB (publ) Been A Good Investment?

Boasting a total shareholder return of 66% over three years, XANO Industri AB (publ) has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, XANO Industri pays its CEO in line with similar-sized companies belonging to the same industry. However, the company's EPS growth numbers over the last three years is not that impressive. On the other hand, shareholder returns over the same period have been very healthy. There is room for improved company performance, but we don't see the CEO compensation as a big issue here.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for XANO Industri that investors should look into moving forward.

Switching gears from XANO Industri, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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