We Take A Look At Why TORM plc's (CPH:TRMD A) CEO Has Earned Their Pay Packet

Key Insights

• TORM's Annual General Meeting to take place on 11th of April
• Salary of US$1.20m is part of CEO Jacob Meldgaard's total remuneration
• Total compensation is similar to the industry average
• TORM's total shareholder return over the past three years was 489% while its EPS grew by 81% over the past three years

The performance at TORM plc (CPH:TRMD A) has been quite strong recently and CEO Jacob Meldgaard has played a role in it. Coming up to the next AGM on 11th of April, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for TORM

Comparing TORM plc's CEO Compensation With The Industry

Our data indicates that TORM plc has a market capitalization of kr.22b, and total annual CEO compensation was reported as US$2.5m for the year to December 2023. Notably, that's an increase of 44% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

In comparison with other companies in the Denmark Oil and Gas industry with market capitalizations ranging from kr.14b to kr.44b, the reported median CEO total compensation was US$2.3m. This suggests that TORM remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	US$1.2m	US$1.1m	48%
Other	US$1.3m	US$632k	52%
Total Compensation	US$2.5m	US$1.7m	100%

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. TORM is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

TORM plc's Growth

TORM plc's earnings per share (EPS) grew 81% per year over the last three years. It achieved revenue growth of 5.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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?

We think that the total shareholder return of 489%, over three years, would leave most TORM plc shareholders smiling. 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 solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for TORM (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from TORM, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.