It's Probably Less Likely That DFDS A/S' (CPH:DFDS) CEO Will See A Huge Pay Rise This Year

Key Insights

• DFDS will host its Annual General Meeting on 15th of March
• Salary of kr.9.00m is part of CEO Torben Carlsen's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, DFDS' EPS grew by 52% and over the past three years, the total loss to shareholders 36%

The underwhelming share price performance of DFDS A/S (CPH:DFDS) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of March. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for DFDS

How Does Total Compensation For Torben Carlsen Compare With Other Companies In The Industry?

According to our data, DFDS A/S has a market capitalization of kr.11b, and paid its CEO total annual compensation worth kr.21m over the year to December 2023. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at kr.9.0m.

In comparison with other companies in the Denmark Shipping industry with market capitalizations ranging from kr.6.8b to kr.22b, the reported median CEO total compensation was kr.21m. This suggests that DFDS remunerates its CEO largely in line with the industry average. Furthermore, Torben Carlsen directly owns kr.28m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	kr.9.0m	kr.9.0m	43%
Other	kr.12m	kr.12m	57%
Total Compensation	kr.21m	kr.21m	100%

On an industry level, around 41% of total compensation represents salary and 59% is other remuneration. Although there is a difference in how total compensation is set, DFDS more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at DFDS A/S' Growth Numbers

Over the past three years, DFDS A/S has seen its earnings per share (EPS) grow by 52% per year. In the last year, its revenue is up 1.6%.

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 DFDS A/S Been A Good Investment?

The return of -36% over three years would not have pleased DFDS A/S shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for DFDS that investors should look into moving forward.

Important note: DFDS 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. 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.