What Can We Conclude About Hifab Group AB (publ.)'s (STO:HIFA B) CEO Pay?

This article will reflect on the compensation paid to Patrik Schelin who has served as CEO of Hifab Group AB (publ.) (STO:HIFA B) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Hifab Group AB (publ.).

See our latest analysis for Hifab Group AB (publ.)

Comparing Hifab Group AB (publ.)'s CEO Compensation With the industry

According to our data, Hifab Group AB (publ.) has a market capitalization of kr183m, and paid its CEO total annual compensation worth kr3.2m over the year to December 2019. That's a modest increase of 4.7% on the prior year. We note that the salary portion, which stands at kr2.26m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under kr1.7b, the reported median total CEO compensation was kr2.3m. This suggests that Patrik Schelin is paid more than the median for the industry. Moreover, Patrik Schelin also holds kr600k worth of Hifab Group AB (publ.) stock directly under their own name.

Talking in terms of the industry, salary represented approximately 71% of total compensation out of all the companies we analyzed, while other remuneration made up 29% of the pie. Our data reveals that Hifab Group AB (publ.) allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Hifab Group AB (publ.)'s Growth

Over the last three years, Hifab Group AB (publ.) has shrunk its earnings per share by 95% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Few shareholders would be pleased to read that EPS have declined. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Hifab Group AB (publ.) Been A Good Investment?

With a total shareholder return of 13% over three years, Hifab Group AB (publ.) shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, Hifab Group AB (publ.) is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS has not been growing sufficiently to impress us, over the last three years. While shareholder returns are acceptable, they don't delight. So you may want to delve deeper, because we don't think the amount Patrik makes is justifiable.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Hifab Group AB (publ.) that investors should think about before committing capital to this stock.

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.

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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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