Charles Høstlund became the CEO of Norway Royal Salmon AS (OB:NRS) in 2014. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Charles Høstlund's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Norway Royal Salmon AS has a market cap of kr8.8b, and reported total annual CEO compensation of kr9.4m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at kr2.7m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from kr4.3b to kr17b, and the median CEO total compensation was kr5.0m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Norway Royal Salmon. Talking in terms of the sector, salary represented approximately 54% of total compensation out of all the companies we analysed, while other remuneration made up 46% of the pie. Readers will want to know that Norway Royal Salmon pays a modest slice of remuneration through salary, as compared to the wider sector.
It would therefore appear that Norway Royal Salmon AS pays Charles Høstlund more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. 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 Norway Royal Salmon has changed from year to year.
Is Norway Royal Salmon AS Growing?
On average over the last three years, Norway Royal Salmon AS has shrunk earnings per share by 24% each year (measured with a line of best fit). Its revenue is up 10.0% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Norway Royal Salmon AS Been A Good Investment?
Boasting a total shareholder return of 53% over three years, Norway Royal Salmon AS 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.
We examined the amount Norway Royal Salmon AS 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. Considering this, shareholders are probably not too worried about the CEO compensation. On another note, Norway Royal Salmon has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
If you want to buy a stock that is better than Norway Royal Salmon, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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