Thomas Sörensson became the CEO of Scandinavian Enviro Systems AB (publ) (STO:SES) in 2016, 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 Scandinavian Enviro Systems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Scandinavian Enviro Systems
How Does Total Compensation For Thomas Sörensson Compare With Other Companies In The Industry?
According to our data, Scandinavian Enviro Systems AB (publ) has a market capitalization of kr1.6b, and paid its CEO total annual compensation worth kr1.8m over the year to December 2019. That's a notable increase of 30% on last year. We note that the salary portion, which stands at kr1.46m constitutes the majority of total compensation received by the CEO.
On comparing similar companies from the same industry with market caps ranging from kr851m to kr3.4b, we found that the median CEO total compensation was kr3.6m. That is to say, Thomas Sörensson is paid under the industry median. Furthermore, Thomas Sörensson directly owns kr1.4m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | kr1.5m | kr1.1m | 81% |
| Other | kr345k | kr247k | 19% |
| Total Compensation | kr1.8m | kr1.4m | 100% |
On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. Our data reveals that Scandinavian Enviro Systems allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Scandinavian Enviro Systems AB (publ)'s Growth
Scandinavian Enviro Systems AB (publ)'s earnings per share (EPS) grew 41% per year over the last three years. It achieved revenue growth of 127% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Scandinavian Enviro Systems AB (publ) Been A Good Investment?
Scandinavian Enviro Systems AB (publ) has generated a total shareholder return of 10% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
As we noted earlier, Scandinavian Enviro Systems pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Meanwhile, EPS growth has been rock solid for the past three years. Shareholder returns, in comparison, have not been as impressive. We would wish for better returns (whether dividends or capital gains) but we do admire the solidEPS growth on show here. So considering these factors, we think Thomas is modestly compensated.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Scandinavian Enviro Systems (3 make us uncomfortable!) 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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About OM:SES
Scandinavian Enviro Systems
Develops, builds, owns, and operates plants for material recovery of resources from used tires in Sweden and internationally.
Flawless balance sheet with acceptable track record.
