This article will reflect on the compensation paid to Jacob Meldgaard who has served as CEO of TORM plc (CPH:TRMD A) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for TORM.
How Does Total Compensation For Jacob Meldgaard Compare With Other Companies In The Industry?
At the time of writing, our data shows that TORM plc has a market capitalization of kr.3.3b, and reported total annual CEO compensation of US$2.2m for the year to December 2019. Notably, that's an increase of 44% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
In comparison with other companies in the industry with market capitalizations ranging from kr.1.3b to kr.5.0b, the reported median CEO total compensation was US$1.4m. Accordingly, our analysis reveals that TORM plc pays Jacob Meldgaard north of the industry median. Furthermore, Jacob Meldgaard directly owns kr.11m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 64% of total compensation out of all the companies we analyzed, while other remuneration made up 36% of the pie. TORM sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at TORM plc's Growth Numbers
Over the past three years, TORM plc has seen its earnings per share (EPS) grow by 139% per year. It achieved revenue growth of 24% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 TORM plc Been A Good Investment?
Since shareholders would have lost about 20% over three years, some TORM plc investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, TORM plc is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we'd stop short of calling it inappropriate, we think Jacob is earning a very handsome sum.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 2 which don't sit too well with us) in TORM we think you should know about.
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.
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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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