How Should Investors React To Bufab AB (publ)’s (STO:BUFAB) CEO Pay?
Jörgen Rosengren has been the CEO of Bufab AB (publ) (STO:BUFAB) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Jörgen Rosengren’s Compensation Compare With Similar Sized Companies?
Our data indicates that Bufab AB (publ) is worth kr3.3b, and total annual CEO compensation is kr5.2m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at kr3.5m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of kr1.8b to kr7.2b. The median total CEO compensation was kr5.3m.
So Jörgen Rosengren receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Bufab has changed over time.
Is Bufab AB (publ) Growing?
Over the last three years Bufab AB (publ) has grown its earnings per share (EPS) by an average of 22% per year (using a line of best fit). In the last year, its revenue is up 19%.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Bufab AB (publ) Been A Good Investment?
Most shareholders would probably be pleased with Bufab AB (publ) for providing a total return of 95% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary…
Jörgen Rosengren is paid around the same as most CEOs of similar size companies.
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Bufab (free visualization of insider trades).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
