Does Jyske Bank A/S's (CPH:JYSK) CEO Pay Reflect Performance?

April 05, 2020
  •  Updated
September 29, 2022
CPSE:JYSK
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In 1997 Anders Dam was appointed CEO of Jyske Bank A/S (CPH:JYSK). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.

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How Does Anders Dam's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Jyske Bank A/S has a market cap of ø11b, and reported total annual CEO compensation of ø10m for the year to December 2019. That's just a smallish increase of 1.0% on last year. Notably, the salary of ø9.9m is the vast majority of the CEO compensation. When we examined a selection of companies with market caps ranging from ø6.9b to ø22b, we found the median CEO total compensation was ø12m.

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 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Jyske Bank is focused on going down a more traditional approach and is paying a higher proportion of compensation through salary, as compared to non-salary benefits.

So Anders Dam is paid around the average of the companies we looked at. 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. The graphic below shows how CEO compensation at Jyske Bank has changed from year to year.

CPSE:JYSK CEO Compensation April 6th 2020
CPSE:JYSK CEO Compensation April 6th 2020

Is Jyske Bank A/S Growing?

Jyske Bank A/S has reduced its earnings per share by an average of 15% a year, over the last three years (measured with a line of best fit). Its revenue is down 4.3% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has Jyske Bank A/S Been A Good Investment?

Given the total loss of 53% over three years, many shareholders in Jyske Bank A/S are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Anders Dam is paid around what is normal for the leaders of comparable size companies.

After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Taking a breather from CEO compensation, we've spotted 2 warning signs for Jyske Bank (of which 1 is a bit concerning!) you should know about in order to have a holistic understanding of the stock.

If you want to buy a stock that is better than Jyske Bank, 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.

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.

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