Is Mowi ASA’s (OB:MOWI) CEO Pay Fair?

Alf-Helge Aarskog became the CEO of Mowi ASA (OB:MOWI) in 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Mowi

How Does Alf-Helge Aarskog’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Mowi ASA has a market cap of kr117b, and reported total annual CEO compensation of €2.2m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at €616k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a group of companies with market caps over €7.3b, we found that their median CEO total compensation was €1.5m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

It would therefore appear that Mowi ASA pays Alf-Helge Aarskog more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You might want to check this free visual report on analyst forecasts for future earnings.

You can see a visual representation of the CEO compensation at Mowi, below.

OB:MOWI CEO Compensation, November 13th 2019
OB:MOWI CEO Compensation, November 13th 2019

Is Mowi ASA Growing?

On average over the last three years, Mowi ASA has shrunk earnings per share by 7.7% each year (measured with a line of best fit). In the last year, its revenue is up 9.3%.

Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

Has Mowi ASA Been A Good Investment?

Boasting a total shareholder return of 86% over three years, Mowi ASA 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.

In Summary…

We examined the amount Mowi ASA pays its CEO, and compared it to the amount paid by other large companies. 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. However, we can’t argue with the strong returns to shareholders, over the same time period. So on this analysis we’d stop short of criticizing the level of CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Mowi (free visualization of insider trades).

Important note: Mowi 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.

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.

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. Thank you for reading.