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Is Gjensidige Forsikring ASA’s (OB:GJF) CEO Paid Enough Relative To Peers?

Heidi Stubbs

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Helge Baastad has been the CEO of Gjensidige Forsikring ASA (OB:GJF) since 2003. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Gjensidige Forsikring

How Does Helge Baastad’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Gjensidige Forsikring ASA has a market cap of øre76b, and is paying total annual CEO compensation of øre9.0m. (This figure is for the year to December 2018). That’s just a smallish increase of 4.1% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at øre5.2m. We looked at a group of companies with market capitalizations from øre34b to øre103b, and the median CEO compensation was øre11m.

So Helge Baastad is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Gjensidige Forsikring has changed over time.

OB:GJF CEO Compensation, February 25th 2019

Is Gjensidige Forsikring ASA Growing?

On average over the last three years, Gjensidige Forsikring ASA has shrunk earnings per share by 6.7% each year (measured with a line of best fit). It saw its revenue drop -1.1% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has Gjensidige Forsikring ASA Been A Good Investment?

Boasting a total shareholder return of 33% over three years, Gjensidige Forsikring ASA has done well by shareholders. 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.

In Summary…

Helge Baastad is paid around the same as most CEOs of similar size companies.

We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can’t see a reason to suggest the pay is inappropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Gjensidige Forsikring shares (free trial).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.