How Does NNIT's (CPH:NNIT) CEO Pay Compare With Company Performance?

This article will reflect on the compensation paid to Per Kogut who has served as CEO of NNIT A/S (CPH:NNIT) since 2007. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for NNIT.

View our latest analysis for NNIT

How Does Total Compensation For Per Kogut Compare With Other Companies In The Industry?

Our data indicates that NNIT A/S has a market capitalization of kr.2.8b, and total annual CEO compensation was reported as kr.11m for the year to December 2019. We note that's a decrease of 9.2% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at kr.4.3m.

In comparison with other companies in the industry with market capitalizations ranging from kr.1.2b to kr.4.9b, the reported median CEO total compensation was kr.5.6m. Accordingly, our analysis reveals that NNIT A/S pays Per Kogut north of the industry median. What's more, Per Kogut holds kr.3.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 75% of total compensation out of all the companies we analyzed, while other remuneration made up 25% of the pie. NNIT sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at NNIT A/S' Growth Numbers

Over the last three years, NNIT A/S has shrunk its earnings per share by 17% per year. Its revenue is down 6.4% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has NNIT A/S Been A Good Investment?

With a three year total loss of 25% for the shareholders, NNIT A/S would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Per is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for NNIT that investors should think about before committing capital to this stock.

Important note: NNIT is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

When trading NNIT or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.