Yahoo Finance Is Melhus Sparebank's (OB:MELG) CEO Salary Justified?
Ragnar Torland has been the CEO of Melhus Sparebank (OB:MELG) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
View our latest analysis for Melhus Sparebank
How Does Ragnar Torland's Compensation Compare With Similar Sized Companies?
Our data indicates that Melhus Sparebank is worth kr403m, and total annual CEO compensation was reported as kr2.5m for the year to December 2019. That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr1.7m. We examined a group of similar sized companies, with market capitalizations of below kr1.9b. The median CEO total compensation in that group is kr3.4m.
So Ragnar Torland receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Melhus Sparebank has changed over time.
Is Melhus Sparebank Growing?
Melhus Sparebank has reduced its earnings per share by an average of 5.2% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 11%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Melhus Sparebank Been A Good Investment?
I think that the total shareholder return of 46%, over three years, would leave most Melhus Sparebank 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.
In Summary...
Remuneration for Ragnar Torland is close enough to the median pay for a CEO of a similar sized company .
The company isn't growing earnings per share, but shareholder returns have been strong over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Melhus Sparebank.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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