In 2013 Jan Kjerpeseth was appointed CEO of Sparebanken Vest (OB:SVEG). 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Jan Kjerpeseth’s Compensation Compare With Similar Sized Companies?
Our data indicates that Sparebanken Vest is worth kr3.9b, and total annual CEO compensation was reported as kr6.5m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at kr4.2m. We examined companies with market caps from kr1.8b to kr7.1b, and discovered that the median CEO total compensation of that group was kr4.8m.
Thus we can conclude that Jan Kjerpeseth receives more in total compensation than the median of a group of companies in the same market, and of similar size to Sparebanken Vest. However, this doesn’t necessarily mean the pay 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 Sparebanken Vest, below.
Is Sparebanken Vest Growing?
On average over the last three years, Sparebanken Vest has grown earnings per share (EPS) by 2.7% each year (using a line of best fit). It achieved revenue growth of 12% over the last year.
This revenue growth could really point to a brighter future. And the modest growth in earnings per share isn’t bad, either. So while performance isn’t amazing, we think it really does seem quite respectable. It could be important to check this free visual depiction of what analysts expect for the future.
Has Sparebanken Vest Been A Good Investment?
Most shareholders would probably be pleased with Sparebanken Vest for providing a total return of 65% over three years. 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.
We compared total CEO remuneration at Sparebanken Vest with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Sparebanken Vest shares (free trial).
Important note: Sparebanken Vest 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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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. Thank you for reading.