Why We Think The CEO Of Autoliv, Inc. (NYSE:ALV) May Soon See A Pay Rise

Key Insights

• Autoliv will host its Annual General Meeting on 8th of May
• CEO Mikael Bratt's total compensation includes salary of US$1.22m
• The total compensation is 53% less than the average for the industry
• Autoliv's total shareholder return over the past three years was 41% while its EPS grew by 29% over the past three years

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The solid performance at Autoliv, Inc. (NYSE:ALV) has been impressive and shareholders will probably be pleased to know that CEO Mikael Bratt has delivered. This would be kept in mind at the upcoming AGM on 8th of May which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

Check out our latest analysis for Autoliv

How Does Total Compensation For Mikael Bratt Compare With Other Companies In The Industry?

According to our data, Autoliv, Inc. has a market capitalization of US$7.2b, and paid its CEO total annual compensation worth US$3.7m over the year to December 2024. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

On examining similar-sized companies in the American Auto Components industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$7.9m. That is to say, Mikael Bratt is paid under the industry median. Furthermore, Mikael Bratt directly owns US$2.2m worth of shares in the company.

On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. Autoliv is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Autoliv, Inc.'s Growth

Autoliv, Inc. has seen its earnings per share (EPS) increase by 29% a year over the past three years. In the last year, its revenue is down 2.3%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Autoliv, Inc. Been A Good Investment?

We think that the total shareholder return of 41%, over three years, would leave most Autoliv, Inc. shareholders smiling. 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...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

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 2 warning signs for Autoliv that you should be aware of before investing.

Switching gears from Autoliv, 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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.