Our Take On Formpipe Software AB (publ)'s (STO:FPIP) CEO Salary

Christian Sundin has been the CEO of Formpipe Software AB (publ) (STO:FPIP) since 2007. 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 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.

See our latest analysis for Formpipe Software

How Does Christian Sundin's Compensation Compare With Similar Sized Companies?

According to our data, Formpipe Software AB (publ) has a market capitalization of kr1.0b, and paid its CEO total annual compensation worth kr3.6m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr2.1m. We examined a group of similar sized companies, with market capitalizations of below kr2.0b. The median CEO total compensation in that group is kr2.1m.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. Our data reveals that Formpipe Software allocates salary in line with the wider market.

It would therefore appear that Formpipe Software AB (publ) pays Christian Sundin more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see a visual representation of the CEO compensation at Formpipe Software, below.

Is Formpipe Software AB (publ) Growing?

Over the last three years Formpipe Software AB (publ) has seen earnings per share (EPS) move in a positive direction by an average of 19% per year (using a line of best fit). Its revenue is down 3.1% over last year.

This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.

Has Formpipe Software AB (publ) Been A Good Investment?

I think that the total shareholder return of 57%, over three years, would leave most Formpipe Software AB (publ) shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared the total CEO remuneration paid by Formpipe Software AB (publ), and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Shifting gears from CEO pay for a second, we've picked out 1 warning sign for Formpipe Software that investors should be aware of in a dynamic business environment.

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

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.

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