Should You Worry About SAS AB (publ)'s (STO:SAS) CEO Pay Cheque?

Simply Wall St

Gusta Gustafson became the CEO of SAS AB (publ) (STO:SAS) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for SAS

How Does Gusta Gustafson's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that SAS AB (publ) has a market cap of kr5.0b, and is paying total annual CEO compensation of kr16m. (This number is for the twelve months until October 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr11m. We looked at a group of companies with market capitalizations from kr1.9b to kr7.6b, and the median CEO total compensation was kr5.0m.

As you can see, Gusta Gustafson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean SAS 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.

You can see a visual representation of the CEO compensation at SAS, below.

OM:SAS CEO Compensation, August 14th 2019

Is SAS AB (publ) Growing?

Over the last three years SAS AB (publ) has grown its earnings per share (EPS) by an average of 9.1% per year (using a line of best fit). Its revenue is up 6.5% over last year.

I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.

Has SAS AB (publ) Been A Good Investment?

Since shareholders would have lost about 26% over three years, some SAS AB (publ) shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at SAS AB (publ) with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling SAS (free visualization of insider trades).

If you want to buy a stock that is better than SAS, this free list of high return, low debt companies is a great place to look.

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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. Thank you for reading.