Is Sensys Gatso Group AB (publ)'s (STO:SENS) CEO Salary Justified?
In 2017 Ivo Mönnink was appointed CEO of Sensys Gatso Group AB (publ) (STO:SENS). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Sensys Gatso Group
How Does Ivo Mönnink's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Sensys Gatso Group AB (publ) has a market cap of kr939m, and reported total annual CEO compensation of kr4.5m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at kr2.6m. We took a group of companies with market capitalizations below kr2.0b, and calculated the median CEO total compensation to be kr2.1m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 59% of total compensation represents salary and 41% is other remuneration. Sensys Gatso Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation
As you can see, Ivo Mönnink is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Sensys Gatso Group AB (publ) is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at Sensys Gatso Group has changed from year to year.
Is Sensys Gatso Group AB (publ) Growing?
On average over the last three years, Sensys Gatso Group AB (publ) has seen earnings per share (EPS) move in a favourable direction by 44% each year (using a line of best fit). In the last year, its revenue is up 6.8%.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Sensys Gatso Group AB (publ) Been A Good Investment?
Sensys Gatso Group AB (publ) has not done too badly by shareholders, with a total return of 1.3%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
We examined the amount Sensys Gatso Group AB (publ) pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Looking into other areas, we've picked out 2 warning signs for Sensys Gatso Group that investors should think about before committing capital to this stock.
Important note: Sensys Gatso Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
