We Discuss Whether Arion banki hf.'s (ICE:ARION) CEO Is Due For A Pay Rise

Key Insights

• Arion banki hf to hold its Annual General Meeting on 13th of March
• Total pay for CEO Benedikt Gislason includes Kr68.0m salary
• The total compensation is 40% less than the average for the industry
• Arion banki hf's total shareholder return over the past three years was 51% while its EPS grew by 22% over the past three years

Shareholders will be pleased by the impressive results for Arion banki hf. (ICE:ARION) recently and CEO Benedikt Gislason has played a key role. At the upcoming AGM on 13th of March, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

See our latest analysis for Arion banki hf

Comparing Arion banki hf.'s CEO Compensation With The Industry

At the time of writing, our data shows that Arion banki hf. has a market capitalization of Kr223b, and reported total annual CEO compensation of Kr87m for the year to December 2023. This means that the compensation hasn't changed much from last year. In particular, the salary of Kr68.0m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Europe Banks industry with market capitalizations between Kr137b and Kr438b, we discovered that the median CEO total compensation of that group was Kr144m. That is to say, Benedikt Gislason is paid under the industry median.

Component	2023	2022	Proportion (2023)
Salary	Kr68m	Kr67m	78%
Other	Kr19m	Kr20m	22%
Total Compensation	Kr87m	Kr87m	100%

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. According to our research, Arion banki hf has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Arion banki hf.'s Growth

Arion banki hf.'s earnings per share (EPS) grew 22% per year over the last three years. It achieved revenue growth of 11% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Arion banki hf. Been A Good Investment?

Boasting a total shareholder return of 51% over three years, Arion banki hf. 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...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Arion banki hf that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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.