Kristian Mørch has been the CEO of Odfjell SE (OB:ODF) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.
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How Does Kristian Mørch’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Odfjell SE has a market cap of kr2.1b, and reported total annual CEO compensation of US$1.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$799k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$454k.
It would therefore appear that Odfjell SE pays Kristian Mørch 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 has changed over time.
Is Odfjell SE Growing?
Over the last three years Odfjell SE has shrunk its earnings per share by an average of 97% per year (measured with a line of best fit). Its revenue is up 4.1% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Odfjell SE Been A Good Investment?
Since shareholders would have lost about 0.4% over three years, some Odfjell SE shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
We compared total CEO remuneration at Odfjell SE with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Odfjell.
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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