Most Shareholders Will Probably Agree With SpareBank 1 Østlandet's (OB:SPOL) CEO Compensation

Key Insights

• SpareBank 1 Østlandet's Annual General Meeting to take place on 30th of March
• Salary of kr4.76m is part of CEO Richard Heiberg's total remuneration
• The total compensation is 51% less than the average for the industry
• SpareBank 1 Østlandet's EPS declined by 0.6% over the past three years while total shareholder return over the past three years was 79%

Shareholders may be wondering what CEO Richard Heiberg plans to do to improve the less than great performance at SpareBank 1 Østlandet (OB:SPOL) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 30th of March. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for SpareBank 1 Østlandet

Comparing SpareBank 1 Østlandet's CEO Compensation With The Industry

Our data indicates that SpareBank 1 Østlandet has a market capitalization of kr14b, and total annual CEO compensation was reported as kr5.0m for the year to December 2022. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at kr4.76m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Norwegian Banks industry with market capitalizations ranging from kr10b to kr33b, the reported median CEO total compensation was kr10m. Accordingly, SpareBank 1 Østlandet pays its CEO under the industry median. Furthermore, Richard Heiberg directly owns kr13m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	kr4.8m	kr4.6m	95%
Other	kr264k	kr274k	5%
Total Compensation	kr5.0m	kr4.9m	100%

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. SpareBank 1 Østlandet is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

SpareBank 1 Østlandet's Growth

SpareBank 1 Østlandet saw earnings per share stay pretty flat over the last three years. In the last year, its revenue changed by just 0.05%.

Its a bit disappointing to see that the company has failed to grow its EPS. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Østlandet Been A Good Investment?

We think that the total shareholder return of 79%, over three years, would leave most SpareBank 1 Østlandet shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which can't be ignored) in SpareBank 1 Østlandet we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.