How Should Investors React To IAR Systems Group AB (publ)'s (STO:IAR B) CEO Pay?
Stefan Skarin has been the CEO of IAR Systems Group AB (publ) (STO:IAR B) since 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for IAR Systems Group
How Does Stefan Skarin's Compensation Compare With Similar Sized Companies?
Our data indicates that IAR Systems Group AB (publ) is worth kr2.6b, and total annual CEO compensation was reported as kr5.5m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at kr3.2m. We looked at a group of companies with market capitalizations from kr955m to kr3.8b, and the median CEO total compensation was kr3.7m.
Thus we can conclude that Stefan Skarin receives more in total compensation than the median of a group of companies in the same market, and of similar size to IAR Systems Group AB (publ). However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at IAR Systems Group, below.
Is IAR Systems Group AB (publ) Growing?
Over the last three years IAR Systems Group AB (publ) has grown its earnings per share (EPS) by an average of 3.8% per year (using a line of best fit). Its revenue is up 8.5% over last year.
I'm not particularly impressed by the revenue growth, but it is good to see modest EPS growth. 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 IAR Systems Group AB (publ) Been A Good Investment?
With a total shareholder return of 3.5% over three years, IAR Systems Group AB (publ) has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
We compared total CEO remuneration at IAR Systems Group AB (publ) with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. Considering this, we wouldn't want to see any big pay rises, although we'd stop short of calling the CEO compensation unfair. So you may want to check if insiders are buying IAR Systems Group shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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