Key Things To Understand About Carlsberg's (CPH:CARL B) CEO Pay Cheque

Cees ´t Hart has been the CEO of Carlsberg A/S (CPH:CARL B) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Carlsberg

Comparing Carlsberg A/S' CEO Compensation With the industry

Our data indicates that Carlsberg A/S has a market capitalization of kr.150b, and total annual CEO compensation was reported as kr.37m for the year to December 2020. Notably, that's a decrease of 25% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at kr.13m.

In comparison with other companies in the industry with market capitalizations over kr.49b , the reported median total CEO compensation was kr.24m. Accordingly, our analysis reveals that Carlsberg A/S pays Cees ´t Hart north of the industry median. Moreover, Cees ´t Hart also holds kr.28m worth of Carlsberg 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 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. In Carlsberg's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Carlsberg A/S' Growth Numbers

Over the past three years, Carlsberg A/S has seen its earnings per share (EPS) grow by 71% per year. It saw its revenue drop 11% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Carlsberg A/S Been A Good Investment?

We think that the total shareholder return of 46%, over three years, would leave most Carlsberg A/S shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we touched on above, Carlsberg A/S is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Cees deserves a raise!

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Carlsberg that investors should look into moving forward.

Important note: Carlsberg 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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