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Is Tomra Systems ASA's (OB:TOM) CEO Pay Justified?

Stefan Ranstrand has been the CEO of Tomra Systems ASA (OB:TOM) since 2009. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Tomra Systems

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

Our data indicates that Tomra Systems ASA is worth kr39b, and total annual CEO compensation is kr9.7m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at kr5.5m. When we examined a selection of companies with market caps ranging from kr18b to kr57b, we found the median CEO total compensation was kr8.2m.

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That means Stefan Ranstrand receives fairly typical remuneration for the CEO of a company that size. 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.

The graphic below shows how CEO compensation at Tomra Systems has changed from year to year.

OB:TOM CEO Compensation, August 12th 2019
OB:TOM CEO Compensation, August 12th 2019

Is Tomra Systems ASA Growing?

Tomra Systems ASA has increased its earnings per share (EPS) by an average of 1.3% a year, over the last three years (using a line of best fit). Its revenue is up 17% over last year.

I would argue that the modest growth in revenue is a notable positive. And, while modest, the earnings per share growth is noticeable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has Tomra Systems ASA Been A Good Investment?

Most shareholders would probably be pleased with Tomra Systems ASA for providing a total return of 209% 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...

Remuneration for Stefan Ranstrand is close enough to the median pay for a CEO of a similar sized company .

The company isn't showing particularly great growth, but shareholder returns have been pleasing. So all things considered I'd venture that the CEO pay is appropriate. Shareholders may want to check for free if Tomra Systems insiders are buying or selling shares.

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

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.

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.