Odd Folland has been the CEO of Sparebank 1 Nordvest (OB:SNOR) since 2005, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Sparebank 1 Nordvest.
How Does Total Compensation For Odd Folland Compare With Other Companies In The Industry?
Our data indicates that Sparebank 1 Nordvest has a market capitalization of kr245m, and total annual CEO compensation was reported as kr2.1m for the year to December 2019. That's a slightly lower by 5.5% over the previous year. Notably, the salary which is kr1.91m, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below kr1.9b, reported a median total CEO compensation of kr2.7m. From this we gather that Odd Folland is paid around the median for CEOs in the industry. Moreover, Odd Folland also holds kr4.3m worth of Sparebank 1 Nordvest stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 81% of total compensation represents salary and 19% is other remuneration. Sparebank 1 Nordvest is paying a higher share of its remuneration through a salary in comparison to the overall 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.
Sparebank 1 Nordvest's Growth
Sparebank 1 Nordvest has reduced its earnings per share by 12% a year over the last three years. Its revenue is down 14% over the previous year.
The decline in EPS is a bit concerning. 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. 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 Sparebank 1 Nordvest Been A Good Investment?
With a total shareholder return of 9.1% over three years, Sparebank 1 Nordvest has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we touched on above, Sparebank 1 Nordvest is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Sparebank 1 Nordvest has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. This doesn't compare well with CEO compensation, which is close to the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for Sparebank 1 Nordvest you should be aware of, and 1 of them is a bit concerning.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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