In 2011 Morten Hübbe was appointed CEO of Tryg A/S (CPH:TRYG). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 Morten Hübbe's Compensation Compare With Similar Sized Companies?
Our data indicates that Tryg A/S is worth ø59b, and total annual CEO compensation was reported as ø19m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at ø11m. We looked at a group of companies with market capitalizations from ø27b to ø81b, and the median CEO total compensation was ø14m.
Thus we can conclude that Morten Hübbe receives more in total compensation than the median of a group of companies in the same market, and of similar size to Tryg A/S. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Tryg, below.
Is Tryg A/S Growing?
Over the last three years Tryg A/S has shrunk its earnings per share by an average of 12% per year (measured with a line of best fit). In the last year, its revenue is up 20%.
Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Tryg A/S Been A Good Investment?
I think that the total shareholder return of 88%, over three years, would leave most Tryg A/S 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 the total CEO remuneration paid by Tryg A/S, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of 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. Considering this, shareholders are probably not too worried about the CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Tryg shares (free trial).
If you want to buy a stock that is better than Tryg, this free list of high return, low debt companies is a great place to look.
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