How Much Does Rottneros' (STO:RROS) CEO Make?

Lennart Eberleh has been the CEO of Rottneros AB (publ) (STO:RROS) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Rottneros pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Rottneros

Comparing Rottneros AB (publ)'s CEO Compensation With the industry

At the time of writing, our data shows that Rottneros AB (publ) has a market capitalization of kr1.3b, and reported total annual CEO compensation of kr8.1m for the year to December 2019. Notably, that's an increase of 37% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at kr3.1m.

In comparison with other companies in the industry with market capitalizations ranging from kr839m to kr3.4b, the reported median CEO total compensation was kr4.9m. Hence, we can conclude that Lennart Eberleh is remunerated higher than the industry median. Furthermore, Lennart Eberleh directly owns kr1.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 52% of total compensation represents salary, while the remainder of 48% is other remuneration. Rottneros sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Rottneros AB (publ)'s Growth Numbers

Over the last three years, Rottneros AB (publ) has shrunk its earnings per share by 12% per year. In the last year, its revenue is down 11%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Rottneros AB (publ) Been A Good Investment?

We think that the total shareholder return of 36%, over three years, would leave most Rottneros AB (publ) shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we touched on above, Rottneros 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. We're not seeing great strides in EPS, but the company has clearly pleased some investors, given the returns over the last three years. So while we don't think, Lennart is paid too much, shareholders may want to see some positive EPS growth before pay rises are given out.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Rottneros that you should be aware of before investing.

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.

If you decide to trade Rottneros, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.