Is NorCom Information Technology GmbH & Co. KGaA (ETR:NC5A) Overpaying Its CEO?
In 1999 Viggo Nordbakk was appointed CEO of NorCom Information Technology GmbH & Co. KGaA (ETR:NC5A). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.
See our latest analysis for NorCom Information Technology GmbH KGaA
How Does Viggo Nordbakk's Compensation Compare With Similar Sized Companies?
Our data indicates that NorCom Information Technology GmbH & Co. KGaA is worth €32m, and total annual CEO compensation was reported as €330k for the year to December 2018. Notably, the salary of €330k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under €183m, and the median CEO total compensation was €216k.
As you can see, Viggo Nordbakk is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean NorCom Information Technology GmbH & Co. KGaA 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 NorCom Information Technology GmbH KGaA has changed from year to year.
Is NorCom Information Technology GmbH & Co. KGaA Growing?
Over the last three years NorCom Information Technology GmbH & Co. KGaA has shrunk its earnings per share by an average of 24% per year (measured with a line of best fit). In the last year, its revenue is down 2.3%.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has NorCom Information Technology GmbH & Co. KGaA Been A Good Investment?
Boasting a total shareholder return of 80% over three years, NorCom Information Technology GmbH & Co. KGaA has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We compared the total CEO remuneration paid by NorCom Information Technology GmbH & Co. KGaA, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. But clearly there are some positives, because investors have done well over the same time frame. Considering this, shareholders are probably not too worried about the CEO compensation. So you may want to check if insiders are buying NorCom Information Technology GmbH KGaA shares with their own money (free access).
If you want to buy a stock that is better than NorCom Information Technology GmbH KGaA, 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.
