Jon Løkke has been the CEO of Nel ASA (OB:NEL) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Jon Løkke's Compensation Compare With Similar Sized Companies?
According to our data, Nel ASA has a market capitalization of kr8.2b, and pays its CEO total annual compensation worth kr4.8m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr2.6m. When we examined a selection of companies with market caps ranging from kr3.6b to kr14b, we found the median CEO total compensation was kr5.2m.
That means Jon Løkke receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Nel, below.
Is Nel ASA Growing?
Over the last three years Nel ASA has shrunk its earnings per share by an average of 35% per year (measured with a line of best fit). It achieved revenue growth of 30% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Shareholders might be interested in this free visualization of analyst forecasts.
Has Nel ASA Been A Good Investment?
Most shareholders would probably be pleased with Nel ASA for providing a total return of 197% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Jon Løkke is close enough to the median pay for a CEO of a similar sized company .
While the growth could be better, the shareholder returns are clearly good. So all things considered I'd venture that the CEO pay is appropriate. Shareholders may want to check for free if Nel insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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