How Should Investors React To Byggmax Group's (STO:BMAX) CEO Pay?

Mattias Ankarberg became the CEO of Byggmax Group AB (publ) (STO:BMAX) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Byggmax Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Byggmax Group

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

At the time of writing, our data shows that Byggmax Group AB (publ) has a market capitalization of kr3.2b, and reported total annual CEO compensation of kr8.0m for the year to December 2019. We note that's an increase of 21% above last year. We note that the salary portion, which stands at kr5.00m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from kr1.7b to kr6.6b, we found that the median CEO total compensation was kr7.0m. So it looks like Byggmax Group compensates Mattias Ankarberg in line with the median for the industry. Furthermore, Mattias Ankarberg directly owns kr5.8m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 64% of total compensation represents salary and 36% is other remuneration. Although there is a difference in how total compensation is set, Byggmax Group more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Byggmax Group AB (publ)'s Growth

Byggmax Group AB (publ) has seen its earnings per share (EPS) increase by 12% a year over the past three years. It achieved revenue growth of 23% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Byggmax Group AB (publ) Been A Good Investment?

Since shareholders would have lost about 1.5% over three years, some Byggmax Group AB (publ) investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Byggmax Group AB (publ) is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, the company has logged negative shareholder returns over the last three years. But on the bright side, EPS growth is positive over the same period. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Byggmax Group that investors should think about before committing capital to this stock.

Switching gears from Byggmax Group, 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.

If you’re looking to trade Byggmax Group, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide 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.