Shareholders Will Probably Hold Off On Increasing Scandi Standard AB (publ)'s (STO:SCST) CEO Compensation For The Time Being

By
Simply Wall St
Published
April 30, 2021
OM:SCST
Source: Shutterstock

Under the guidance of CEO Leif Hansen, Scandi Standard AB (publ) (STO:SCST) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 07 May 2021. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Scandi Standard

How Does Total Compensation For Leif Hansen Compare With Other Companies In The Industry?

At the time of writing, our data shows that Scandi Standard AB (publ) has a market capitalization of kr4.4b, and reported total annual CEO compensation of kr15m for the year to December 2020. That's a notable increase of 63% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at kr5.4m.

On examining similar-sized companies in the industry with market capitalizations between kr1.7b and kr6.8b, we discovered that the median CEO total compensation of that group was kr6.1m. Hence, we can conclude that Leif Hansen is remunerated higher than the industry median. Moreover, Leif Hansen also holds kr49m worth of Scandi Standard stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary kr5.4m kr5.0m 37%
Other kr9.2m kr3.9m 63%
Total Compensationkr15m kr8.9m100%

Talking in terms of the industry, salary represented approximately 67% of total compensation out of all the companies we analyzed, while other remuneration made up 33% of the pie. In Scandi Standard's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
OM:SCST CEO Compensation May 1st 2021

A Look at Scandi Standard AB (publ)'s Growth Numbers

Scandi Standard AB (publ) has seen its earnings per share (EPS) increase by 5.0% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Scandi Standard AB (publ) Been A Good Investment?

With a total shareholder return of 18% over three years, Scandi Standard 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...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Scandi Standard that investors should think about before committing capital to this stock.

Important note: Scandi Standard is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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