Magnar Øyhovden became the CEO of Sbanken ASA (OB:SBANK) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Magnar Øyhovden’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Sbanken ASA has a market cap of kr6.9b, and is paying total annual CEO compensation of kr3.8m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at kr2.8m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of kr3.6b to kr14b. The median total CEO compensation was kr5.2m.
So Magnar Øyhovden receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Sbanken, below.
Is Sbanken ASA Growing?
Over the last three years Sbanken ASA has shrunk its earnings per share by an average of 2.2% per year (measured with a line of best fit). It saw its revenue drop -2.3% over the last year.
Unfortunately there is a complete lack of earnings per share improvement, over three years. This is compounded by the fact revenue is actually down on last year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Sbanken ASA Been A Good Investment?
Sbanken ASA has served shareholders reasonably well, with a total return of 13% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Magnar Øyhovden is paid around the same as most CEOs of similar size companies.
We feel that earnings per share have been a bit disappointing, but and we don’t think the total returns are amazing. We’re not saying the CEO pay is too generous, but we’d venture the company should look to improve its business metrics (and share price) before paying any more. So you may want to check if insiders are buying Sbanken shares with their own money (free access).
If you want to buy a stock that is better than Sbanken, this free list of high return, low debt companies is a great place to look.
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