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Is Equinor ASA's (OB:EQNR) CEO Pay Justified?

Simply Wall St

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In 2014 Eldar Sætre was appointed CEO of Equinor ASA (OB:EQNR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Equinor

How Does Eldar Sætre's Compensation Compare With Similar Sized Companies?

According to our data, Equinor ASA has a market capitalization of øre566b, and pays its CEO total annual compensation worth US$2.1m. (This figure is for the year to December 2018). We note that's an increase of 14% above last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$1.7m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

So Eldar Sætre receives a similar amount to the median CEO pay, amongst the companies we looked at. 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.

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

OB:EQNR CEO Compensation, June 15th 2019

Is Equinor ASA Growing?

Over the last three years Equinor ASA has grown its earnings per share (EPS) by an average of 104% per year (using a line of best fit). In the last year, its revenue is up 15%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.

Has Equinor ASA Been A Good Investment?

Boasting a total shareholder return of 43% over three years, Equinor ASA 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...

Eldar Sætre is paid around what is normal the leaders of larger companies.

The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Equinor.

If you want to buy a stock that is better than Equinor, this free list of high return, low debt companies is a great place to look.

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.