June 20, 2021

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How Should Investors React To Bredband2 i Skandinavien AB (publ)’s (STO:BRE2) CEO Pay?

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Daniel Krook became the CEO of Bredband2 i Skandinavien AB (publ) (STO:BRE2) in 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. 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.

See our latest analysis for Bredband2 i Skandinavien

How Does Daniel Krook’s Compensation Compare With Similar Sized Companies?

Our data indicates that Bredband2 i Skandinavien AB (publ) is worth kr848m, and total annual CEO compensation was reported as kr4.2m for the year to December 2019. That’s a fairly small increase of 5.8% on year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at kr2.1m. We took a group of companies with market capitalizations below kr2.0b, and calculated the median CEO total compensation to be kr2.1m.

Now let’s take a look at the pay mix on an industry and company level to gain a better understanding of where Bredband2 i Skandinavien stands. On a sector level, around 49% of total compensation represents salary and 51% is other remuneration. Bredband2 i Skandinavien does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.

Thus we can conclude that Daniel Krook receives more in total compensation than the median of a group of companies in the same market, and of similar size to Bredband2 i Skandinavien AB (publ). However, this doesn’t necessarily mean the pay is too high. 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 Bredband2 i Skandinavien has changed from year to year.

OM:BRE2 CEO Compensation April 6th 2020

Is Bredband2 i Skandinavien AB (publ) Growing?

Bredband2 i Skandinavien AB (publ) has seen earnings per share (EPS) move positively by an average of 12% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 12%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 Bredband2 i Skandinavien AB (publ) Been A Good Investment?

I think that the total shareholder return of 38%, over three years, would leave most Bredband2 i Skandinavien AB (publ) 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…

We compared the total CEO remuneration paid by Bredband2 i Skandinavien AB (publ), and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. On another note, we’ve spotted 2 warning signs for Bredband2 i Skandinavien that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

If you spot an error that warrants correction, please contact the editor at [email protected] 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.

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