Stock Analysis

This Is Why We Think Marel hf.'s (ICE:MAREL) CEO Might Get A Pay Rise Approved By Shareholders

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Key Insights

  • Marel hf to hold its Annual General Meeting on 22nd of March
  • Total pay for CEO Arni Thordarson includes €787.0k salary
  • Total compensation is 36% below industry average
  • Marel hf's EPS declined by 20% over the past three years while total shareholder return over the past three years was 16%

Shareholders will probably not be disappointed by the robust results at Marel hf. (ICE:MAREL) recently and they will be keeping this in mind as they go into the AGM on 22nd of March. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

See our latest analysis for Marel hf

Comparing Marel hf.'s CEO Compensation With The Industry

Our data indicates that Marel hf. has a market capitalization of Kr405b, and total annual CEO compensation was reported as €1.3m for the year to December 2022. We note that's a small decrease of 7.5% on last year. We note that the salary of €787.0k makes up a sizeable portion of the total compensation received by the CEO.

On examining similar-sized companies in the Europe Machinery industry with market capitalizations between Kr284b and Kr910b, we discovered that the median CEO total compensation of that group was €2.1m. Accordingly, Marel hf pays its CEO under the industry median. Furthermore, Arni Thordarson directly owns Kr124m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20222021Proportion (2022)
Salary €787k €728k 60%
Other €527k €693k 40%
Total Compensation€1.3m €1.4m100%

On an industry level, roughly 52% of total compensation represents salary and 48% is other remuneration. It's interesting to note that Marel hf pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ICSE:MAREL CEO Compensation March 16th 2023

Marel hf.'s Growth

Over the last three years, Marel hf. has shrunk its earnings per share by 20% per year. In the last year, its revenue is up 26%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Marel hf. Been A Good Investment?

With a total shareholder return of 16% over three years, Marel hf. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Marel hf (1 is concerning!) that you should be aware of before investing here.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Marel hf is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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