Svenn-Tore Larsen became the CEO of Nordic Semiconductor ASA (OB:NOD) in 2002. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.
How Does Svenn-Tore Larsen's Compensation Compare With Similar Sized Companies?
Our data indicates that Nordic Semiconductor ASA is worth kr9.8b, and total annual CEO compensation was reported as US$587k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$421k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$563k.
So Svenn-Tore Larsen receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Nordic Semiconductor has changed over time.
Is Nordic Semiconductor ASA Growing?
Nordic Semiconductor ASA has reduced its earnings per share by an average of 35% a year, over the last three years (measured with a line of best fit). Its revenue is down 2.9% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Nordic Semiconductor ASA Been A Good Investment?
Most shareholders would probably be pleased with Nordic Semiconductor ASA for providing a total return of 55% over three years. 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.
Svenn-Tore Larsen is paid around the same as most CEOs of similar size companies.
The company isn't growing earnings per share, but shareholder returns have been strong over the last three years. So we can't see a reason to suggest the pay is inappropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Nordic Semiconductor.
Important note: Nordic Semiconductor may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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