Our Take On LeoVegas' (STO:LEO) CEO Salary

Gustaf Hagman has been the CEO of LeoVegas AB (publ) (STO:LEO) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for LeoVegas

How Does Total Compensation For Gustaf Hagman Compare With Other Companies In The Industry?

Our data indicates that LeoVegas AB (publ) has a market capitalization of kr3.9b, and total annual CEO compensation was reported as €321k for the year to December 2019. We note that's a decrease of 10% compared to last year. In particular, the salary of €312.0k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between kr1.8b and kr7.2b, we discovered that the median CEO total compensation of that group was €639k. Accordingly, LeoVegas pays its CEO under the industry median. Furthermore, Gustaf Hagman directly owns kr319m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. Investors will find it interesting that LeoVegas pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at LeoVegas AB (publ)'s Growth Numbers

Over the last three years, LeoVegas AB (publ) has shrunk its earnings per share by 13% per year. It achieved revenue growth of 9.2% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has LeoVegas AB (publ) Been A Good Investment?

Since shareholders would have lost about 38% over three years, some LeoVegas AB (publ) investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Gustaf receives almost all of their compensation through a salary. As we touched on above, LeoVegas AB (publ) is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 4 warning signs for LeoVegas that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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