Staffan Dahlström has been the CEO of HMS Networks AB (publ) (STO:HMS) since 2009.
First, this article will compare CEO compensation with compensation at similar sized companies.
Then we’ll look at a snap shot of the business growth.
And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years.
This method should give us information to assess how appropriately the company pays the CEO.
How Does Staffan Dahlström’s Compensation Compare With Similar Sized Companies?
According to our data, HMS Networks AB (publ) has a market capitalization of kr7.7b, and pays its CEO total annual compensation worth kr4.5m.
(This number is for the twelve months until December 2017).
While we always look at total compensation first, we note that the salary component is less, at kr2.5m.
When we examined a selection of companies with market caps ranging from kr3.7b to kr15b, we found the median CEO total compensation was kr5.9m.
That means Staffan Dahlström 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.
You can see, below, how CEO compensation at HMS Networks has changed over time.
Is HMS Networks AB (publ) Growing?
Over the last three years HMS Networks AB (publ) has grown its earnings per share (EPS) by an average of 33% per year (using a line of best fit).
It achieved revenue growth of 15% over the last year.
This demonstrates that the company has been improving recently. A good result.
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 HMS Networks AB (publ) Been A Good Investment?
I think that the total shareholder return of 200%, over three years, would leave most HMS Networks AB (publ) shareholders smiling.
So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Staffan Dahlström is paid around what is normal the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction.
So one could argue the CEO compensation is quite modest, if you consider company performance!
So you may want to check if insiders are buying HMS Networks shares with their own money (free access).
Important note: HMS Networks may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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