Shareholders May Not Be So Generous With TORM plc's (CPH:TRMD A) CEO Compensation And Here's Why

Key Insights

• TORM's Annual General Meeting to take place on 16th of April
• Salary of US$1.22m is part of CEO Jacob Meldgaard's total remuneration
• The overall pay is 521% above the industry average
• TORM's total shareholder return over the past three years was 170% while its EPS grew by 46% over the past three years

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Under the guidance of CEO Jacob Meldgaard, TORM plc (CPH:TRMD A) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 16th of April. However, some shareholders may still want to keep CEO compensation within reason.

See 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.9.9b, and paid its CEO total annual compensation worth US$8.0m over the year to December 2024. That's a notable increase of 16% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

For comparison, other companies in the Denmark Oil and Gas industry with market capitalizations ranging between kr.6.8b and kr.22b had a median total CEO compensation of US$1.3m. Hence, we can conclude that Jacob Meldgaard is remunerated higher than the industry median. What's more, Jacob Meldgaard holds kr.8.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$1.2m	US$1.2m	15%
Other	US$6.8m	US$5.7m	85%
Total Compensation	US$8.0m	US$6.9m	100%

Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. In TORM's case, non-salary compensation represents a greater slice of total remuneration, 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.

TORM plc's Growth

TORM plc has seen its earnings per share (EPS) increase by 46% a year over the past three years. It achieved revenue growth of 2.6% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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?

Most shareholders would probably be pleased with TORM plc for providing a total return of 170% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which is a bit unpleasant) in TORM we think you should know about.

Important note: TORM 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.