Here's Why We Think Coloplast A/S' (CPH:COLO B) CEO Compensation Looks Fair for the time being

Under the guidance of CEO Kristian Villumsen, Coloplast A/S (CPH:COLO B) 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 01 December 2022. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for Coloplast

How Does Total Compensation For Kristian Villumsen Compare With Other Companies In The Industry?

According to our data, Coloplast A/S has a market capitalization of kr.186b, and paid its CEO total annual compensation worth kr.21m over the year to September 2022. This means that the compensation hasn't changed much from last year. In particular, the salary of kr.11.6m, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations over kr.57b, the reported median total CEO compensation was kr.28m. From this we gather that Kristian Villumsen is paid around the median for CEOs in the industry. What's more, Kristian Villumsen holds kr.80m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	kr.12m	kr.11m	54%
Other	kr.9.8m	kr.10m	46%
Total Compensation	kr.21m	kr.22m	100%

On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Coloplast is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Coloplast A/S' Growth Numbers

Coloplast A/S's earnings per share (EPS) grew 6.7% per year over the last three years. Its revenue is up 16% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the modest growth in EPS isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. 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 Coloplast A/S Been A Good Investment?

Coloplast A/S has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO 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. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

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 2 warning signs (and 1 which is a bit unpleasant) in Coloplast we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.