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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. 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?
At the time of writing our data says that Sparebanken Vest has a market cap of øre3.2b, and is paying total annual CEO compensation of øre6.3m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at øre4.0m. When we examined a selection of companies with market caps ranging from øre1.7b to øre6.8b, we found the median CEO total compensation was øre4.6m.
As you can see, Jan Kjerpeseth is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Sparebanken Vest is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Sparebanken Vest has changed from year to year.
Is Sparebanken Vest Growing?
Over the last three years Sparebanken Vest has shrunk its earnings per share by an average of 1.6% per year (measured with a line of best fit). Its revenue is up 11% over last year.
Unfortunately there is a complete lack of earnings per share improvement, over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Sparebanken Vest Been A Good Investment?
I think that the total shareholder return of 103%, over three years, would leave most Sparebanken Vest shareholders smiling. 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.
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.We think many shareholders would be underwhelmed with the business growth over the last three years.
On the other hand, returns have been good, so the company is doing something right. So on this analysis we’d stop short of criticizing the level of CEO compensation. Shareholders may want to check for free if Sparebanken Vest insiders are buying or selling shares.
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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