Yahoo Finance Is Demant A/S's (CPH:DEMANT) CEO Pay Fair?
Søren Nielsen has been the CEO of Demant A/S (CPH:DEMANT) since 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
View our latest analysis for Demant
How Does Søren Nielsen's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Demant A/S has a market cap of ø42b, and reported total annual CEO compensation of ø13m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at ø12m. When we examined a selection of companies with market caps ranging from ø27b to ø80b, we found the median CEO total compensation was ø14m.
That means Søren Nielsen receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Demant has changed over time.
Is Demant A/S Growing?
Demant A/S has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 7.8%.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Demant A/S Been A Good Investment?
With a total shareholder return of 32% over three years, Demant A/S shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
Remuneration for Søren Nielsen is close enough to the median pay for a CEO of a similar sized company .
The company is growing EPS but shareholder returns have been sound but not amazing. As a result of these considerations, I would suggest the CEO pay is reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Demant 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.
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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.
