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Is ISS A/S's (CPH:ISS) CEO Pay Justified?

Simply Wall St

Jeff Gravenhorst became the CEO of ISS A/S (CPH:ISS) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for ISS

How Does Jeff Gravenhorst's Compensation Compare With Similar Sized Companies?

Our data indicates that ISS A/S is worth ø30b, 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 ø9.7m. We examined companies with market caps from ø14b to ø43b, and discovered that the median CEO total compensation of that group was ø14m.

As you can see, Jeff Gravenhorst is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean ISS A/S 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.

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

CPSE:ISS CEO Compensation, October 17th 2019

Is ISS A/S Growing?

ISS A/S has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 7.4% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. 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 ISS A/S Been A Good Investment?

Since shareholders would have lost about 32% over three years, some ISS A/S shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at ISS A/S with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! So you may want to check if insiders are buying ISS shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.