Here's What We Think About Djurslands Bank's (CPH:DJUR) CEO Pay

Lars Kristensen has been the CEO of Djurslands Bank A/S (CPH:DJUR) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Djurslands Bank

Comparing Djurslands Bank A/S' CEO Compensation With the industry

According to our data, Djurslands Bank A/S has a market capitalization of kr.790m, and paid its CEO total annual compensation worth kr.2.8m over the year to December 2019. That's a fairly small increase of 3.1% over the previous year. Notably, the salary which is kr.2.49m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below kr.1.2b, we found that the median total CEO compensation was kr.2.9m. From this we gather that Lars Kristensen is paid around the median for CEOs in the industry.

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. Our data reveals that Djurslands Bank allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Djurslands Bank A/S' Growth Numbers

Over the last three years, Djurslands Bank A/S has shrunk its earnings per share by 27% per year. It saw its revenue drop 18% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Djurslands Bank A/S Been A Good Investment?

With a total shareholder return of 25% over three years, Djurslands Bank A/S shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, Djurslands Bank A/S is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Djurslands Bank has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. These figures do not go well against CEO compensation, which is more or less equal to the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Djurslands Bank that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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