Tor Lie has been the CEO of Jaeren Sparebank (OB:JAEREN) since 2010. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
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How Does Tor Lie’s Compensation Compare With Similar Sized Companies?
According to our data, Jaeren Sparebank has a market capitalization of øre666m, and pays its CEO total annual compensation worth øre3.7m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at øre1.8m. We examined a group of similar sized companies, with market capitalizations of below øre1.8b. The median CEO total compensation in that group is øre2.6m.
As you can see, Tor Lie is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Jaeren Sparebank is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Jaerenrebank has changed from year to year.
Is Jaeren Sparebank Growing?
Jaeren Sparebank has reduced its earnings per share by an average of 5.0% a year, over the last three years (measured with a line of best fit). Revenue was pretty flat on last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the flat revenue is seriously uninspiring. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Jaeren Sparebank Been A Good Investment?
I think that the total shareholder return of 83%, over three years, would leave most Jaeren Sparebank shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Jaeren Sparebank, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
But clearly there are some positives, because investors have done well over the same time frame. So on this analysis we’d stop short of criticizing the level of CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Jaerenrebank.
Important note: Jaerenrebank may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.