How Much is Lån & Spar Bank's (CPH:LASP) CEO Getting Paid?

John Christiansen became the CEO of Lån & Spar Bank A/S (CPH:LASP) in 2007, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Lån & Spar Bank pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Lån & Spar Bank

How Does Total Compensation For John Christiansen Compare With Other Companies In The Industry?

At the time of writing, our data shows that Lån & Spar Bank A/S has a market capitalization of kr.1.7b, and reported total annual CEO compensation of kr.4.1m for the year to December 2020. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at kr.3.33m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from kr.613m to kr.2.5b, the reported median CEO total compensation was kr.3.9m. From this we gather that John Christiansen is paid around the median for CEOs in the industry.

Talking in terms of the industry, salary represented approximately 88% of total compensation out of all the companies we analyzed, while other remuneration made up 12% of the pie. Our data reveals that Lån & Spar Bank allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Lån & Spar Bank A/S' Growth

Over the last three years, Lån & Spar Bank A/S has shrunk its earnings per share by 4.6% per year. Its revenue is up 6.3% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Lån & Spar Bank A/S Been A Good Investment?

Lån & Spar Bank A/S has generated a total shareholder return of 9.8% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As previously discussed, John is compensated close to the median for companies of its size, and which belong to the same industry. According to our analysis, Lån & Spar Bank is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. This doesn't compare well with CEO compensation, which is close 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 one thing, but it is also interesting to check if the CEO is buying or selling Lån & Spar Bank (free visualization of insider trades).

Important note: Lån & Spar Bank is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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