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Is SpareBank 1 BV's (OB:SBVG) CEO Pay Justified?

Simply Wall St

In 2015 Rune Fjeldstad was appointed CEO of SpareBank 1 BV (OB:SBVG). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for SpareBank 1 BV

How Does Rune Fjeldstad's Compensation Compare With Similar Sized Companies?

According to our data, SpareBank 1 BV has a market capitalization of kr2.5b, and paid its CEO total annual compensation worth kr6.4m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at kr2.8m. When we examined a selection of companies with market caps ranging from kr888m to kr3.6b, we found the median CEO total compensation was kr4.3m.

Thus we can conclude that Rune Fjeldstad receives more in total compensation than the median of a group of companies in the same market, and of similar size to SpareBank 1 BV. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at SpareBank 1 BV, below.

OB:SBVG CEO Compensation, January 15th 2020

Is SpareBank 1 BV Growing?

On average over the last three years, SpareBank 1 BV has grown earnings per share (EPS) by 7.8% each year (using a line of best fit). Its revenue is down 2.8% over last year.

I would argue that the lack of revenue growth in the last year is less than ideal, but the improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has SpareBank 1 BV Been A Good Investment?

Boasting a total shareholder return of 80% over three years, SpareBank 1 BV has done well by shareholders. 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.

In Summary...

We compared total CEO remuneration at SpareBank 1 BV with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying SpareBank 1 BV 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.

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.

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. Thank you for reading.