Most Shareholders Will Probably Agree With Sparebanken Møre's (OB:MORG) CEO Compensation

CEO Trond Nydal has done a decent job of delivering relatively good performance at Sparebanken Møre (OB:MORG) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 24 November 2022. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for Sparebanken Møre

How Does Total Compensation For Trond Nydal Compare With Other Companies In The Industry?

At the time of writing, our data shows that Sparebanken Møre has a market capitalization of kr3.9b, and reported total annual CEO compensation of kr2.8m for the year to December 2021. That's a notable decrease of 15% on last year. Notably, the salary which is kr2.58m, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from kr2.0b to kr8.1b, we found that the median CEO total compensation was kr3.6m. From this we gather that Trond Nydal is paid around the median for CEOs in the industry.

Component	2021	2020	Proportion (2021)
Salary	kr2.6m	kr2.8m	92%
Other	kr215k	kr464k	8%
Total Compensation	kr2.8m	kr3.3m	100%

On an industry level, roughly 80% of total compensation represents salary and 20% is other remuneration. Sparebanken Møre pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. 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.

Sparebanken Møre's Growth

Sparebanken Møre saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is up 11%.

We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sparebanken Møre Been A Good Investment?

Boasting a total shareholder return of 42% over three years, Sparebanken Møre has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Sparebanken Møre that investors should look into moving forward.

Important note: Sparebanken Møre is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.