U.S. Markets closed

Should You Worry About Odfjell Drilling Ltd.'s (OB:ODL) CEO Pay?

Simply Wall St

Simen Lieungh has been the CEO of Odfjell Drilling Ltd. (OB:ODL) since 2010. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.

See our latest analysis for Odfjell Drilling

How Does Simen Lieungh's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Odfjell Drilling Ltd. has a market cap of kr6.4b, and reported total annual CEO compensation of US$1.0m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$672k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$563k.

It would therefore appear that Odfjell Drilling Ltd. pays Simen Lieungh 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.

You can see, below, how CEO compensation at Odfjell Drilling has changed over time.

OB:ODL CEO Compensation, January 16th 2020

Is Odfjell Drilling Ltd. Growing?

Over the last three years Odfjell Drilling Ltd. has grown its earnings per share (EPS) by an average of 58% per year (using a line of best fit). Its revenue is up 9.8% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.

Has Odfjell Drilling Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Odfjell Drilling Ltd. for providing a total return of 71% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount Odfjell Drilling Ltd. 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.

However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Odfjell Drilling insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.