Søren Mortensen became the CEO of Alm. Brand A/S (CPH:ALMB) in 2001. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Søren Mortensen’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Alm. Brand A/S has a market cap of ø9.4b, and reported total annual CEO compensation of ø9.7m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at ø6.6m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ø6.8b to ø22b. The median total CEO compensation was ø6.8m.
It would therefore appear that Alm. Brand A/S pays Søren Mortensen more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Alm. Brand has changed from year to year.
Is Alm. Brand A/S Growing?
On average over the last three years, Alm. Brand A/S has shrunk earnings per share by 10.0% each year (measured with a line of best fit). Its revenue is down 7.4% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Alm. Brand A/S Been A Good Investment?
Alm. Brand A/S has served shareholders reasonably well, with a total return of 30% over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We examined the amount Alm. Brand A/S pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don’t think the CEO pay is too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Alm. Brand.
Important note: Alm. Brand may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.