How Should Investors React To Høland og Setskog Sparebank’s (OB:HSPG) CEO Pay?

John Bjørknes has been the CEO of Høland og Setskog Sparebank (OB:HSPG) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Høland og Setskogrebank

How Does John Bjørknes’s Compensation Compare With Similar Sized Companies?

According to our data, Høland og Setskog Sparebank has a market capitalization of øre67m, and pays its CEO total annual compensation worth øre1m. We examined a group of similar sized companies, with market capitalizations of below øre1.7b. The median CEO compensation in that group is øre3m.

A first glance this seems like a real positive for shareholders, since John Bjørknes is paid less than the average compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Høland og Setskogrebank, below.

OB:HSPG CEO Compensation October 24th 18
OB:HSPG CEO Compensation October 24th 18

Is Høland og Setskog Sparebank Growing?

On average over the last three years, Høland og Setskog Sparebank has grown earnings per share (EPS) by 34% each year. It achieved revenue growth of 3.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Høland og Setskog Sparebank Been A Good Investment?

With a three year total loss of 11%, Høland og Setskog Sparebank would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

It appears that Høland og Setskog Sparebank remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. We’re not critical of the remuneration John Bjørknes receives, but it would be good to see improved returns to shareholders before the remuneration grows too much.

When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Høland og Setskog Sparebank (free visualization of insider trades).

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.