We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Sparebanken Sør's (OB:SOR) CEO For Now

Key Insights

• Sparebanken Sør to hold its Annual General Meeting on 30th of March
• CEO Geir Bergskaug's total compensation includes salary of kr3.08m
• The overall pay is 50% above the industry average
• Over the past three years, Sparebanken Sør's EPS grew by 0.6% and over the past three years, the total shareholder return was 75%

Performance at Sparebanken Sør (OB:SOR) has been reasonably good and CEO Geir Bergskaug has done a decent job of steering the company in the right direction. 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 30th of March. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Sparebanken Sør

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

Our data indicates that Sparebanken Sør has a market capitalization of kr5.3b, and total annual CEO compensation was reported as kr5.4m for the year to December 2022. Notably, that's a decrease of 8.1% over the year before. Notably, the salary which is kr3.08m, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Norwegian Banks industry with market capitalizations ranging between kr2.1b and kr8.3b had a median total CEO compensation of kr3.6m. Accordingly, our analysis reveals that Sparebanken Sør pays Geir Bergskaug north of the industry median. Furthermore, Geir Bergskaug directly owns kr11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	kr3.1m	kr3.0m	57%
Other	kr2.3m	kr2.9m	43%
Total Compensation	kr5.4m	kr5.9m	100%

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. In Sparebanken Sør's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Sparebanken Sør's Growth

Earnings per share at Sparebanken Sør are much the same as they were three years ago, albeit with slightly higher. In the last year, its revenue is up 7.1%.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Sparebanken Sør Been A Good Investment?

Boasting a total shareholder return of 75% over three years, Sparebanken Sør has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same 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. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in Sparebanken Sør we think you should know about.

Important note: Sparebanken Sør 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.