Is Prosafe SE’s (OB:PRS) CEO Overpaid Relative To Its Peers?

In 2017 Jesper Andresen was appointed CEO of Prosafe SE (OB:PRS). First, this article will compare CEO compensation with compensation at similar sized 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Prosafe

How Does Jesper Andresen’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Prosafe SE has a market cap of kr589m, and reported total annual CEO compensation of US$905k for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$404k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$348k.

Thus we can conclude that Jesper Andresen receives more in total compensation than the median of a group of companies in the same market, and of similar size to Prosafe SE. However, this doesn’t necessarily mean the pay 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 might want to check this free visual report on analyst forecasts for future earnings.

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

OB:PRS CEO Compensation, November 1st 2019
OB:PRS CEO Compensation, November 1st 2019

Is Prosafe SE Growing?

Over the last three years Prosafe SE has grown its earnings per share (EPS) by an average of 15% per year (using a line of best fit). It saw its revenue drop 12% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.

Has Prosafe SE Been A Good Investment?

With a three year total loss of 76%, Prosafe SE would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared the total CEO remuneration paid by Prosafe SE, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Prosafe (free visualization of insider trades).

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.

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.