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Does Tomra Systems ASA’s (OB:TOM) CEO Pay Matter?

Stefan Ranstrand has been the CEO of Tomra Systems ASA (OB:TOM) since 2009. 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Tomra Systems

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How Does Stefan Ranstrand’s Compensation Compare With Similar Sized Companies?

According to our data, Tomra Systems ASA has a market capitalization of øre29b, and pays its CEO total annual compensation worth øre7.8m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at øre5.3m. When we examined a selection of companies with market caps ranging from øre17b to øre55b, we found the median CEO compensation was øre7.8m.

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So Stefan Ranstrand is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

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

OB:TOM CEO Compensation January 13th 19
OB:TOM CEO Compensation January 13th 19

Is Tomra Systems ASA Growing?

Tomra Systems ASA saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease. In the last year, its revenue is up 14%.

In the last three years the company has failed to grow earnings per s. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has Tomra Systems ASA Been A Good Investment?

Most shareholders would probably be pleased with Tomra Systems ASA for providing a total return of 159% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Stefan Ranstrand is paid around what is normal the leaders of comparable size companies.

We feel that earnings per share have been a bit disappointing, but it’s nice to see positive shareholder returns over the last three years. So we think most shareholders wouldn’t be too worried about CEO compensation, which is close to the median for similar sized companies. Shareholders may want to check for free if Tomra Systems insiders are buying or selling shares.

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.