In 2007 Rune Bjerke was appointed CEO of DNB ASA (OB:DNB). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Rune Bjerke’s Compensation Compare With Similar Sized Companies?
Our data indicates that DNB ASA is worth kr227b, and total annual CEO compensation is kr9.0m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at kr6.2m. We took a group of companies with market capitalizations over kr72b, and calculated the median CEO total compensation to be kr15m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
Most shareholders would consider it a positive that Rune Bjerke takes less in total compensation than the CEOs of most other large companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at DNB has changed from year to year.
Is DNB ASA Growing?
Over the last three years DNB ASA has grown its earnings per share (EPS) by an average of 10% per year (using a line of best fit). It achieved revenue growth of 5.9% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
Has DNB ASA Been A Good Investment?
Most shareholders would probably be pleased with DNB ASA for providing a total return of 70% over three years. 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.
It looks like DNB ASA pays its CEO less than the average at large companies. Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Rune Bjerke deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. So you may want to check if insiders are buying DNB shares with their own money (free access).
If you want to buy a stock that is better than DNB, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.