We Think The Compensation For Nordea Bank Abp's (STO:NDA SE) CEO Looks About Right

Simply Wall St
March 18, 2022
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Performance at Nordea Bank Abp (STO:NDA SE) has been reasonably good and CEO Frank Vang-Jensen 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 24 March 2022. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for Nordea Bank Abp

How Does Total Compensation For Frank Vang-Jensen Compare With Other Companies In The Industry?

Our data indicates that Nordea Bank Abp has a market capitalization of kr404b, and total annual CEO compensation was reported as €2.9m for the year to December 2021. That's a notable increase of 16% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.4m.

On comparing similar companies in the industry with market capitalizations above kr75b, we found that the median total CEO compensation was €2.6m. From this we gather that Frank Vang-Jensen is paid around the median for CEOs in the industry. Moreover, Frank Vang-Jensen also holds kr12m worth of Nordea Bank Abp stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary €1.4m €1.3m 47%
Other €1.5m €1.2m 53%
Total Compensation€2.9m €2.5m100%

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. Nordea Bank Abp pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

OM:NDA SE CEO Compensation March 18th 2022

Nordea Bank Abp's Growth

Nordea Bank Abp has seen its earnings per share (EPS) increase by 9.1% a year over the past three years. Its revenue is up 20% over the last year.

This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 Nordea Bank Abp Been A Good Investment?

We think that the total shareholder return of 48%, over three years, would leave most Nordea Bank Abp shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar 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. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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 Nordea Bank Abp that investors should look into moving forward.

Switching gears from Nordea Bank Abp, 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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