Is Ringkjøbing Landbobank A/S (CPH:RILBA) Excessively Paying Its CEO?

In 2012 John Fisker was appointed CEO of Ringkjøbing Landbobank A/S (CPH:RILBA). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Ringkjøbing Landbobank

How Does John Fisker’s Compensation Compare With Similar Sized Companies?

According to our data, Ringkjøbing Landbobank A/S has a market capitalization of ø14b, and paid its CEO total annual compensation worth ø5.6m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at ø4.3m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ø6.8b to ø22b. The median total CEO compensation was ø5.1m.

That means John Fisker 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. It could be important to check this free visual depiction of what analysts expect for the future.

The graphic below shows how CEO compensation at Ringkjøbing Landbobank has changed from year to year.

CPSE:RILBA CEO Compensation, December 2nd 2019
CPSE:RILBA CEO Compensation, December 2nd 2019

Is Ringkjøbing Landbobank A/S Growing?

Ringkjøbing Landbobank A/S saw earnings per share stay pretty flat over the last three years, albeit with a slight positive trend. Its revenue is up 50% over last year.

It’s great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. I’d stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list.

Has Ringkjøbing Landbobank A/S Been A Good Investment?

Boasting a total shareholder return of 89% over three years, Ringkjøbing Landbobank A/S has done well by shareholders. 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…

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

While the growth could be better, the shareholder returns are clearly good. So all things considered I’d venture that the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Ringkjøbing Landbobank (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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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