What Does Modern Ekonomi Sverige Holding's (STO:ME) CEO Pay Reveal?

Frans Blom has been the CEO of Modern Ekonomi Sverige Holding AB (publ) (STO:ME) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Modern Ekonomi Sverige Holding.

Check out our latest analysis for Modern Ekonomi Sverige Holding

How Does Total Compensation For Frans Blom Compare With Other Companies In The Industry?

Our data indicates that Modern Ekonomi Sverige Holding AB (publ) has a market capitalization of kr61m, and total annual CEO compensation was reported as kr7.8m for the year to September 2020. That is, the compensation was roughly the same as last year. Notably, the salary of kr7.8m is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below kr1.7b, we found that the median total CEO compensation was kr2.6m. Accordingly, our analysis reveals that Modern Ekonomi Sverige Holding AB (publ) pays Frans Blom north of the industry median.

Talking in terms of the industry, salary represented approximately 78% of total compensation out of all the companies we analyzed, while other remuneration made up 22% of the pie. At the company level, Modern Ekonomi Sverige Holding pays Frans Blom solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Modern Ekonomi Sverige Holding AB (publ)'s Growth Numbers

Modern Ekonomi Sverige Holding AB (publ)'s earnings per share (EPS) grew 69% per year over the last three years. In the last year, its revenue is up 1.3%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Modern Ekonomi Sverige Holding AB (publ) Been A Good Investment?

With a total shareholder return of 10% over three years, Modern Ekonomi Sverige Holding AB (publ) shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Modern Ekonomi Sverige Holding rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Frans is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Modern Ekonomi Sverige Holding (1 shouldn't be ignored!) that you should be aware of before investing here.

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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