What Does Botnia Exploration Holding's (STO:BOTX) CEO Pay Reveal?

Simply Wall St
December 28, 2020

This article will reflect on the compensation paid to Thomas Ljung who has served as CEO of Botnia Exploration Holding AB (publ) (STO:BOTX) since 2017. 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 Botnia Exploration Holding

How Does Total Compensation For Thomas Ljung Compare With Other Companies In The Industry?

According to our data, Botnia Exploration Holding AB (publ) has a market capitalization of kr359m, and paid its CEO total annual compensation worth kr1.3m over the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of kr960.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below kr1.7b, reported a median total CEO compensation of kr1.8m. That is to say, Thomas Ljung is paid under the industry median. Moreover, Thomas Ljung also holds kr5.0m worth of Botnia Exploration Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20192018Proportion (2019)
Salary kr960k kr930k 76%
Other kr305k kr305k 24%
Total Compensationkr1.3m kr1.2m100%

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. Botnia Exploration Holding is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

OM:BOTX CEO Compensation December 29th 2020

Botnia Exploration Holding AB (publ)'s Growth

Botnia Exploration Holding AB (publ) has seen its earnings per share (EPS) increase by 41% a year over the past three years. Its revenue is up 7.4% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Botnia Exploration Holding AB (publ) Been A Good Investment?

We think that the total shareholder return of 36%, over three years, would leave most Botnia Exploration Holding 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.

To Conclude...

As we noted earlier, Botnia Exploration Holding pays its CEO lower than the norm for similar-sized companies belonging to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Thomas's performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which doesn't sit too well with us) in Botnia Exploration Holding we think you should know about.

Switching gears from Botnia Exploration Holding, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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