How Should Investors React To AB Industrivärden's (STO:INDU A) CEO Pay?

This article will reflect on the compensation paid to Helena Stjernholm who has served as CEO of AB Industrivärden (publ) (STO:INDU A) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for AB Industrivärden.

View our latest analysis for AB Industrivärden

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

At the time of writing, our data shows that AB Industrivärden (publ) has a market capitalization of kr116b, and reported total annual CEO compensation of kr21m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at kr7.2m.

For comparison, other companies in the industry with market capitalizations above kr68b, reported a median total CEO compensation of kr20m. This suggests that AB Industrivärden remunerates its CEO largely in line with the industry average. Furthermore, Helena Stjernholm directly owns kr20m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 39% of total compensation represents salary, while the remainder of 61% is other remuneration. AB Industrivärden pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

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

Over the last three years, AB Industrivärden (publ) has shrunk its earnings per share by 19% per year. It achieved revenue growth of 942% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has AB Industrivärden (publ) Been A Good Investment?

Most shareholders would probably be pleased with AB Industrivärden (publ) for providing a total return of 36% over three years. 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.

In Summary...

As we noted earlier, AB Industrivärden pays its CEO in line with similar-sized companies belonging to the same industry. Investors will be happy that AB Industrivärden has produced strong shareholder returns for the past three years. Revenues have also showed some positive momentum, recently. On a sour note, EPS growth has been negative. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at AB Industrivärden.

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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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