What We Learned About Swedish Orphan Biovitrum’s (STO:SOBI) CEO Pay

Guido Oelkers has been the CEO of Swedish Orphan Biovitrum AB (publ) (STO:SOBI) since 2017, and this article will examine the executive’s compensation 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 Swedish Orphan Biovitrum.

See our latest analysis for Swedish Orphan Biovitrum

How Does Total Compensation For Guido Oelkers Compare With Other Companies In The Industry?

At the time of writing, our data shows that Swedish Orphan Biovitrum AB (publ) has a market capitalization of kr61b, and reported total annual CEO compensation of kr33m for the year to December 2019. We note that’s an increase of 30% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at kr9.5m.

On examining similar-sized companies in the industry with market capitalizations between kr37b and kr110b, we discovered that the median CEO total compensation of that group was kr60m. That is to say, Guido Oelkers is paid under the industry median. Moreover, Guido Oelkers also holds kr45m worth of Swedish Orphan Biovitrum stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20192018Proportion (2019)
Salary kr9.5m kr9.1m 29%
Other kr24m kr17m 71%
Total Compensationkr33m kr26m100%

On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. It’s interesting to note that Swedish Orphan Biovitrum allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.

OM:SOBI CEO Compensation July 14th 2020

A Look at Swedish Orphan Biovitrum AB (publ)’s Growth Numbers

Over the past three years, Swedish Orphan Biovitrum AB (publ) has seen its earnings per share (EPS) grow by 67% per year. Its revenue is up 49% 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Swedish Orphan Biovitrum AB (publ) Been A Good Investment?

Boasting a total shareholder return of 64% over three years, Swedish Orphan Biovitrum AB (publ) has done well by shareholders. 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.

In Summary…

As we touched on above, Swedish Orphan Biovitrum AB (publ) is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. When taking into account the company’s strong earnings 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 Guido’s performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Swedish Orphan Biovitrum that investors should look into moving forward.

Important note: Swedish Orphan Biovitrum 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. 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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