Shareholders May Be More Conservative With TORM plc's (CPH:TRMD A) CEO Compensation For Now

Performance at TORM plc (CPH:TRMD A) has been reasonably good and CEO Jacob Meldgaard has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 14 April 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for TORM

Comparing TORM plc's CEO Compensation With the industry

According to our data, TORM plc has a market capitalization of kr.4.3b, and paid its CEO total annual compensation worth US$2.4m over the year to December 2020. That's a notable increase of 10% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

For comparison, other companies in the same industry with market capitalizations ranging between kr.2.5b and kr.10b had a median total CEO compensation of US$1.2m. Accordingly, our analysis reveals that TORM plc pays Jacob Meldgaard north of the industry median. Moreover, Jacob Meldgaard also holds kr.15m worth of TORM stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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. It's interesting to note that TORM allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at TORM plc's Growth Numbers

TORM plc's earnings per share (EPS) grew 213% per year over the last three years. It achieved revenue growth of 7.8% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has TORM plc Been A Good Investment?

Boasting a total shareholder return of 46% over three years, TORM plc has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for TORM that investors should think about before committing capital to this stock.

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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