In 2008 Thomas Eldered was appointed CEO of Recipharm AB (publ) (STO:RECI B). First, this article will compare CEO compensation with compensation at similar sized companies. 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.
How Does Thomas Eldered's Compensation Compare With Similar Sized Companies?
Our data indicates that Recipharm AB (publ) is worth kr10b, and total annual CEO compensation was reported as kr3.5m for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth kr3.4m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of kr3.9b to kr16b. The median total CEO compensation was kr6.0m.
A first glance this seems like a real positive for shareholders, since Thomas Eldered is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Recipharm has changed from year to year.
Is Recipharm AB (publ) Growing?
Recipharm AB (publ) has increased its earnings per share (EPS) by an average of 25% a year, over the last three years (using a line of best fit). Its revenue is up 17% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Recipharm AB (publ) Been A Good Investment?
With a total shareholder return of 29% over three years, Recipharm AB (publ) shareholders would, in general, be reasonably content. 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.
It looks like Recipharm AB (publ) pays its CEO less than similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Thomas Eldered is overcompensated. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. Whatever your view on compensation, you might want to check if insiders are buying or selling Recipharm shares (free trial).
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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