Here's Why SP Group A/S' (CPH:SPG) CEO May Have Their Pay Bumped Up

Shareholders will probably not be disappointed by the robust results at SP Group A/S (CPH:SPG) recently and they will be keeping this in mind as they go into the AGM on 27 April 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for SP Group

How Does Total Compensation For Frank Gad Compare With Other Companies In The Industry?

According to our data, SP Group A/S has a market capitalization of kr.4.0b, and paid its CEO total annual compensation worth kr.4.4m over the year to December 2020. Notably, that's a decrease of 17% over the year before. Notably, the salary which is kr.4.20m, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between kr.2.5b and kr.9.9b had a median total CEO compensation of kr.7.8m. This suggests that Frank Gad is paid below the industry median. What's more, Frank Gad holds kr.83m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	kr.4.2m	kr.4.2m	96%
Other	kr.197k	kr.1.1m	4%
Total Compensation	kr.4.4m	kr.5.3m	100%

On an industry level, roughly 51% of total compensation represents salary and 49% is other remuneration. SP Group has gone down a largely traditional route, paying Frank Gad a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at SP Group A/S' Growth Numbers

SP Group A/S has seen its earnings per share (EPS) increase by 2.8% a year over the past three years. It achieved revenue growth of 8.2% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 SP Group A/S Been A Good Investment?

Boasting a total shareholder return of 43% over three years, SP Group A/S has done well by shareholders. 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.

In Summary...

Frank receives almost all of their compensation through a salary. Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for SP Group that investors should think about before committing capital to this stock.

Important note: SP Group 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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