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Is Atea ASA's (OB:ATEA) CEO Paid Enough Relative To Peers?

Simply Wall St

Steinar Sonsteby has been the CEO of Atea ASA (OB:ATEA) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Atea

How Does Steinar Sonsteby's Compensation Compare With Similar Sized Companies?

Our data indicates that Atea ASA is worth kr14b, and total annual CEO compensation was reported as kr7.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at kr4.1m. When we examined a selection of companies with market caps ranging from kr9.0b to kr29b, we found the median CEO total compensation was kr5.3m.

As you can see, Steinar Sonsteby is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Atea ASA 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.

The graphic below shows how CEO compensation at Atea has changed from year to year.

OB:ATEA CEO Compensation, December 22nd 2019

Is Atea ASA Growing?

Over the last three years Atea ASA has shrunk its earnings per share by an average of 2.8% per year (measured with a line of best fit). In the last year, its revenue is up 6.0%.

The lack of earnings per share growth in the last three years is unimpressive. 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. It could be important to check this free visual depiction of what analysts expect for the future.

Has Atea ASA Been A Good Investment?

I think that the total shareholder return of 94%, over three years, would leave most Atea ASA shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount Atea ASA pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years. However, we can't argue with the strong returns to shareholders, over the same time period. So on this analysis we'd stop short of criticizing the level of CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Atea (free visualization of insider trades).

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.