Jan Kjerpeseth has been the CEO of Sparebanken Vest (OB:SVEG) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Jan Kjerpeseth’s Compensation Compare With Similar Sized Companies?
Our data indicates that Sparebanken Vest is worth kr3.1b, and total annual CEO compensation is kr6.5m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at kr4.2m. We looked at a group of companies with market capitalizations from kr1.8b to kr7.3b, and the median CEO total compensation was kr4.2m.
It would therefore appear that Sparebanken Vest pays Jan Kjerpeseth more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Sparebanken Vest has changed over time.
Is Sparebanken Vest Growing?
On average over the last three years, Sparebanken Vest has grown earnings per share (EPS) by 1.1% each year (using a line of best fit). Its revenue is up 11% over last year.
I would argue that the modest growth in revenue is a notable positive. And the improvement in earnings per share is modest but respectable. So while performance isn’t amazing, we think it really does seem quite respectable.
Has Sparebanken Vest Been A Good Investment?
I think that the total shareholder return of 61%, over three years, would leave most Sparebanken Vest shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We compared total CEO remuneration at Sparebanken Vest with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. Considering this fine result for investors, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Sparebanken Vest insiders are buying or selling shares.
Important note: Sparebanken Vest may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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