We Think Shareholders Are Less Likely To Approve A Large Pay Rise For A.P. Møller - Mærsk A/S' (CPH:MAERSK B) CEO For Now

Key Insights

• A.P. Møller - Mærsk will host its Annual General Meeting on 14th of March
• Salary of US$1.70m is part of CEO Vincent Clerc's total remuneration
• The overall pay is 186% above the industry average
• Over the past three years, A.P. Møller - Mærsk's EPS grew by 19% and over the past three years, the total shareholder return was 5.7%

Performance at A.P. Møller - Mærsk A/S (CPH:MAERSK B) has been reasonably good and CEO Vincent Clerc has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 14th of March, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for A.P. Møller - Mærsk

How Does Total Compensation For Vincent Clerc Compare With Other Companies In The Industry?

At the time of writing, our data shows that A.P. Møller - Mærsk A/S has a market capitalization of kr.147b, and reported total annual CEO compensation of US$6.0m for the year to December 2023. That's a notable increase of 49% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.7m.

In comparison with other companies in the Denmark Shipping industry with market capitalizations over kr.54b, the reported median total CEO compensation was US$2.1m. This suggests that Vincent Clerc is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	US$1.7m	US$1.4m	29%
Other	US$4.3m	US$2.6m	71%
Total Compensation	US$6.0m	US$4.0m	100%

On an industry level, roughly 41% of total compensation represents salary and 59% is other remuneration. A.P. Møller - Mærsk pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A.P. Møller - Mærsk A/S' Growth

Over the past three years, A.P. Møller - Mærsk A/S has seen its earnings per share (EPS) grow by 19% per year. It saw its revenue drop 37% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. 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 A.P. Møller - Mærsk A/S Been A Good Investment?

A.P. Møller - Mærsk A/S has generated a total shareholder return of 5.7% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for A.P. Møller - Mærsk (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from A.P. Møller - Mærsk, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.