We have been pretty impressed with the performance at EQL Pharma AB (publ) (NGM:EQL) recently and CEO Christer Fahraeus deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 18 August 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
Comparing EQL Pharma AB (publ)'s CEO Compensation With the industry
According to our data, EQL Pharma AB (publ) has a market capitalization of kr1.1b, and paid its CEO total annual compensation worth kr1.1m over the year to March 2021. Notably, that's a decrease of 33% over the year before. Notably, the salary of kr1.1m is the entirety of the CEO compensation.
For comparison, other companies in the industry with market capitalizations below kr1.7b, reported a median total CEO compensation of kr1.4m. From this we gather that Christer Fahraeus is paid around the median for CEOs in the industry.
On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. At the company level, EQL Pharma pays Christer Fahraeus solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
EQL Pharma AB (publ)'s Growth
EQL Pharma AB (publ) has seen its earnings per share (EPS) increase by 113% a year over the past three years. Its revenue is up 150% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 EQL Pharma AB (publ) Been A Good Investment?
We think that the total shareholder return of 326%, over three years, would leave most EQL Pharma AB (publ) shareholders smiling. 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.
EQL Pharma rewards its CEO solely through a salary, ignoring non-salary benefits completely. The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for EQL Pharma that investors should look into moving forward.
Important note: EQL Pharma 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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