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Should You Worry About G5 Entertainment AB (publ)'s (STO:G5EN) CEO Pay?

Simply Wall St

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The CEO of G5 Entertainment AB (publ) (STO:G5EN) is Vlad Suglobov. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for G5 Entertainment

How Does Vlad Suglobov's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that G5 Entertainment AB (publ) has a market cap of kr860m, and is paying total annual CEO compensation of kr5.4m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at kr2.9m. We took a group of companies with market capitalizations below kr1.9b, and calculated the median CEO total compensation to be kr1.7m.

Thus we can conclude that Vlad Suglobov receives more in total compensation than the median of a group of companies in the same market, and of similar size to G5 Entertainment AB (publ). However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at G5 Entertainment has changed from year to year.

OM:G5EN CEO Compensation, May 2nd 2019

Is G5 Entertainment AB (publ) Growing?

Over the last three years G5 Entertainment AB (publ) has grown its earnings per share (EPS) by an average of 63% per year (using a line of best fit). In the last year, its revenue is up 28%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Shareholders might be interested in this free visualization of analyst forecasts.

Has G5 Entertainment AB (publ) Been A Good Investment?

Most shareholders would probably be pleased with G5 Entertainment AB (publ) for providing a total return of 241% over three years. 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.

In Summary...

We compared the total CEO remuneration paid by G5 Entertainment 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. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling G5 Entertainment (free visualization of insider trades).

If you want to buy a stock that is better than G5 Entertainment, 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.