Why Duroc's (STO:DURC B) CEO Pay Matters

This article will reflect on the compensation paid to John Häger who has served as CEO of Duroc AB (publ) (STO:DURC B) since 2016. This analysis will also assess whether Duroc pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Duroc

How Does Total Compensation For John Häger Compare With Other Companies In The Industry?

At the time of writing, our data shows that Duroc AB (publ) has a market capitalization of kr1.2b, and reported total annual CEO compensation of kr2.9m for the year to June 2020. We note that's an increase of 10% above last year. Notably, the salary which is kr1.99m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under kr1.7b, the reported median total CEO compensation was kr1.4m. Accordingly, our analysis reveals that Duroc AB (publ) pays John Häger north of the industry median.

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. Duroc sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Duroc AB (publ)'s Growth

Over the last three years, Duroc AB (publ) has shrunk its earnings per share by 3.8% per year. It saw its revenue drop 4.5% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Duroc AB (publ) Been A Good Investment?

We think that the total shareholder return of 37%, over three years, would leave most Duroc 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 touched on above, Duroc AB (publ) is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company isn't growing EPS, but shareholder returns have been impressive over the last three years. So while we don't think, John is paid too much, shareholders may want to see some positive EPS growth before pay rises are given out.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Duroc that investors should be aware of in a dynamic business environment.

Switching gears from Duroc, 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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