How Much Is Sparebanken Sør (OB:SOR) Paying Its CEO?

This article will reflect on the compensation paid to Geir Bergskaug who has served as CEO of Sparebanken Sør (OB:SOR) since 2014. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Sparebanken Sør

How Does Total Compensation For Geir Bergskaug Compare With Other Companies In The Industry?

According to our data, Sparebanken Sør has a market capitalization of kr1.8b, and paid its CEO total annual compensation worth kr5.3m over the year to December 2019. That's a modest increase of 4.1% on the prior year. Notably, the salary which is kr2.89m, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from kr862m to kr3.4b, we found that the median CEO total compensation was kr3.7m. Hence, we can conclude that Geir Bergskaug is remunerated higher than the industry median. What's more, Geir Bergskaug holds kr7.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 81% of total compensation represents salary, while the remainder of 19% is other remuneration. It's interesting to note that Sparebanken Sør allocates a smaller portion of compensation to salary 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.

Sparebanken Sør's Growth

Sparebanken Sør saw earnings per share stay pretty flat over the last three years. Revenue was pretty flat on last year.

A lack of EPS improvement is not good to see. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Sparebanken Sør Been A Good Investment?

Sparebanken Sør has generated a total shareholder return of 24% 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...

As we noted earlier, Sparebanken Sør pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look great when you realize that the company has been suffering from negative EPS growth for the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you can understand why we do not think CEO compensation is particularly modest!

Whatever your view on compensation, you might want to check if insiders are buying or selling Sparebanken Sør shares (free trial).

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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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