A Quick Analysis On Image Systems' (STO:IS) CEO Salary

Johan Friberg became the CEO of Image Systems AB (STO:IS) in 2017, 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 Image Systems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Image Systems

Comparing Image Systems AB's CEO Compensation With the industry

At the time of writing, our data shows that Image Systems AB has a market capitalization of kr107m, and reported total annual CEO compensation of kr2.1m for the year to December 2019. We note that's an increase of 11% above last year. We note that the salary portion, which stands at kr1.40m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under kr1.7b, the reported median total CEO compensation was kr3.4m. Accordingly, Image Systems pays its CEO under the industry median.

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. There isn't a significant difference between Image Systems and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Image Systems AB's Growth

Over the last three years, Image Systems AB has shrunk its earnings per share by 80% per year. It achieved revenue growth of 7.3% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Image Systems AB Been A Good Investment?

With a three year total loss of 42% for the shareholders, Image Systems AB 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 touched on above, Image Systems AB is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. It's tough to say that Johan is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

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. We did our research and spotted 1 warning sign for Image Systems that investors should look into moving forward.

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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