Increases to CEO Compensation Might Be Put On Hold For Now at Instabank ASA (OB:INSTA)

Key Insights

• Instabank's Annual General Meeting to take place on 10th of April
• Salary of kr3.54m is part of CEO Robert Berg's total remuneration
• The total compensation is 81% higher than the average for the industry
• Over the past three years, Instabank's EPS grew by 1.1% and over the past three years, the total loss to shareholders 38%

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The underwhelming share price performance of Instabank ASA (OB:INSTA) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 10th of April. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Instabank

How Does Total Compensation For Robert Berg Compare With Other Companies In The Industry?

Our data indicates that Instabank ASA has a market capitalization of kr862m, and total annual CEO compensation was reported as kr4.6m for the year to December 2024. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at kr3.54m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Norwegian Banks industry with market capitalizations below kr2.1b, reported a median total CEO compensation of kr2.5m. Accordingly, our analysis reveals that Instabank ASA pays Robert Berg north of the industry median. Moreover, Robert Berg also holds kr13m worth of Instabank stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	kr3.5m	kr3.2m	77%
Other	kr1.0m	kr1.4m	23%
Total Compensation	kr4.6m	kr4.7m	100%

Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. There isn't a significant difference between Instabank and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Instabank ASA's Growth

Instabank ASA's earnings per share (EPS) grew 1.1% per year over the last three years. Its revenue is up 13% over the last year.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future .

Has Instabank ASA Been A Good Investment?

Few Instabank ASA shareholders would feel satisfied with the return of -38% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Instabank that you should be aware of before investing.

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.