What Can We Learn About Sparekassen Sjælland-Fyn's (CPH:SPKSJF) CEO Compensation?

Lars Petersson became the CEO of Sparekassen Sjælland-Fyn A/S (CPH:SPKSJF) in 2010, 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 Sparekassen Sjælland-Fyn pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Sparekassen Sjælland-Fyn

Comparing Sparekassen Sjælland-Fyn A/S' CEO Compensation With the industry

According to our data, Sparekassen Sjælland-Fyn A/S has a market capitalization of kr.1.6b, and paid its CEO total annual compensation worth kr.5.1m over the year to December 2019. This means that the compensation hasn't changed much from last year. Notably, the salary of kr.5.1m is the entirety of the CEO compensation.

On comparing similar companies from the same industry with market caps ranging from kr.611m to kr.2.4b, we found that the median CEO total compensation was kr.4.0m. So it looks like Sparekassen Sjælland-Fyn compensates Lars Petersson in line with the median for the industry. What's more, Lars Petersson holds kr.1.3m worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 85% of total compensation out of all the companies we analyzed, while other remuneration made up 15% of the pie. Speaking on a company level, Sparekassen Sjælland-Fyn prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

Sparekassen Sjælland-Fyn A/S' Growth

Over the last three years, Sparekassen Sjælland-Fyn A/S has shrunk its earnings per share by 9.8% per year. In the last year, its revenue changed by just 0.7%.

The decline in EPS is a bit concerning. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sparekassen Sjælland-Fyn A/S Been A Good Investment?

Since shareholders would have lost about 17% over three years, some Sparekassen Sjælland-Fyn A/S investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Sparekassen Sjælland-Fyn pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, Sparekassen Sjælland-Fyn 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. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

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. We've identified 1 warning sign for Sparekassen Sjælland-Fyn that investors should be aware of in a dynamic business environment.

Important note: Sparekassen Sjælland-Fyn 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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