What We Learned About EQL Pharma's (NGM:EQL) CEO Compensation

Christer Fåhraeus is the CEO of EQL Pharma AB (publ) (NGM:EQL), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for EQL Pharma.

Check out our latest analysis for EQL Pharma

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 kr1.7m over the year to March 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary of kr1.7m 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 kr2.2m. This suggests that EQL Pharma remunerates its CEO largely in line with the industry average.

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. Speaking on a company level, EQL Pharma prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

EQL Pharma AB (publ)'s Growth

EQL Pharma AB (publ) has seen its earnings per share (EPS) increase by 237% a year over the past three years. Its revenue is up 180% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has EQL Pharma AB (publ) Been A Good Investment?

Most shareholders would probably be pleased with EQL Pharma AB (publ) for providing a total return of 247% 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.

To Conclude...

EQL Pharma pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Christer is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Christer is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for EQL Pharma (1 makes us a bit 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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