We Think The Compensation For Sparebanken Sør's (OB:SOR) CEO Looks About Right

Key Insights

• Sparebanken Sør will host its Annual General Meeting on 21st of March
• CEO Geir Bergskaug's total compensation includes salary of kr4.06m
• The overall pay is comparable to the industry average
• Sparebanken Sør's total shareholder return over the past three years was 25% while its EPS grew by 13% over the past three years

CEO Geir Bergskaug has done a decent job of delivering relatively good performance at Sparebanken Sør (OB:SOR) 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 21st of March. We present our case of why we think CEO compensation looks fair.

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 kr6.1b, and paid its CEO total annual compensation worth kr5.4m over the year to December 2023. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at kr4.06m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Norwegian Banks industry with market capitalizations ranging between kr2.1b and kr8.4b had a median total CEO compensation of kr5.5m. This suggests that Sparebanken Sør remunerates its CEO largely in line with the industry average. Furthermore, Geir Bergskaug directly owns kr12m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	kr4.1m	kr3.1m	76%
Other	kr1.3m	kr2.3m	24%
Total Compensation	kr5.4m	kr5.4m	100%

On an industry level, around 78% of total compensation represents salary and 22% is other remuneration. Although there is a difference in how total compensation is set, Sparebanken Sør more or less reflects the market in terms of setting the salary. 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

Sparebanken Sør's earnings per share (EPS) grew 13% per year over the last three years. It achieved revenue growth of 28% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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?

With a total shareholder return of 25% over three years, Sparebanken Sør shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

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, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Sparebanken Sør that investors should look into moving forward.

Switching gears from Sparebanken Sør, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.