Here's What We Learned About The CEO Pay At Hexagon AB (publ) (STO:HEXA B)

This article will reflect on the compensation paid to Ola Rollén who has served as CEO of Hexagon AB (publ) (STO:HEXA B) since 2000. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Hexagon.

See our latest analysis for Hexagon

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

According to our data, Hexagon AB (publ) has a market capitalization of kr220b, and paid its CEO total annual compensation worth €5.3m over the year to December 2019. That's a fairly small increase of 3.7% over the previous year. We note that the salary portion, which stands at €3.09m constitutes the majority of total compensation received by the CEO.

On comparing similar companies in the industry with market capitalizations above kr70b, we found that the median total CEO compensation was €3.0m. Hence, we can conclude that Ola Rollén is remunerated higher than the industry median. What's more, Ola Rollén holds kr171m 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 63% of total compensation represents salary, while the remainder of 37% is other remuneration. Hexagon is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Hexagon AB (publ)'s Growth

Hexagon AB (publ) has seen its earnings per share (EPS) increase by 2.5% a year over the past three years. In the last year, its revenue is down 2.1%.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Hexagon AB (publ) Been A Good Investment?

Boasting a total shareholder return of 59% over three years, Hexagon AB (publ) has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we touched on above, Hexagon 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. Still, shareholder returns for the company are very impressive for the last three years. On the other hand, EPS growth — over the same period — is not as impressive. All things considered, we don't think there's a reason to criticize CEO compensation, though we hope Hexagon will post healthier EPS growth moving forward.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Hexagon (free visualization of insider trades).

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.

When trading Hexagon or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on 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.