Shareholders Will Probably Not Have Any Issues With Pareto Bank ASA's (OB:PARB) CEO Compensation

CEO Tiril Villum has done a decent job of delivering relatively good performance at Pareto Bank ASA (OB:PARB) 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 25 March 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for Pareto Bank

How Does Total Compensation For Tiril Villum Compare With Other Companies In The Industry?

According to our data, Pareto Bank ASA has a market capitalization of kr3.2b, and paid its CEO total annual compensation worth kr4.2m over the year to December 2020. That's a modest increase of 4.0% on the prior year. Notably, the salary which is kr2.83m, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between kr1.7b and kr6.8b had a median total CEO compensation of kr3.7m. From this we gather that Tiril Villum is paid around the median for CEOs in the industry. Furthermore, Tiril Villum directly owns kr15m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	kr2.8m	kr2.8m	67%
Other	kr1.4m	kr1.3m	33%
Total Compensation	kr4.2m	kr4.1m	100%

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. In Pareto Bank's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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.

Pareto Bank ASA's Growth

Pareto Bank ASA's earnings per share (EPS) grew 4.3% per year over the last three years. It achieved revenue growth of 7.2% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Pareto Bank ASA Been A Good Investment?

Pareto Bank ASA has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Pareto Bank that you should be aware of before investing.

Important note: Pareto Bank 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. 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.
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