What Can We Conclude About Clavister Holding AB (publ.)'s (STO:CLAV) CEO Pay?

John Vestberg has been the CEO of Clavister Holding AB (publ.) (STO:CLAV) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Clavister Holding AB (publ.)

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

Our data indicates that Clavister Holding AB (publ.) has a market capitalization of kr177m, and total annual CEO compensation was reported as kr2.9m for the year to December 2019. That's a slightly lower by 3.6% over the previous year. Notably, the salary which is kr1.82m, 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 kr1.6m. This suggests that John Vestberg is paid more than the median for the industry. What's more, John Vestberg holds kr3.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. It's interesting to note that Clavister Holding AB (publ.) allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Clavister Holding AB (publ.)'s Growth

Clavister Holding AB (publ.) has reduced its earnings per share by 30% a year over the last three years. In the last year, its revenue is up 12%.

The decline in EPS is a bit concerning. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Clavister Holding AB (publ.) Been A Good Investment?

With a three year total loss of 70% for the shareholders, Clavister Holding AB (publ.) would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Clavister Holding AB (publ.) pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Clavister Holding AB (publ.) that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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