Kraft Bank ASA's (OB:KRAB) CEO Will Probably Find It Hard To See A Huge Raise This Year

The underwhelming share price performance of Kraft Bank ASA (OB:KRAB) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 10 March 2022 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Kraft Bank

How Does Total Compensation For Svein Førland Compare With Other Companies In The Industry?

Our data indicates that Kraft Bank ASA has a market capitalization of kr441m, and total annual CEO compensation was reported as kr3.2m for the year to December 2021. Notably, that's an increase of 15% over the year before. Notably, the salary which is kr2.16m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below kr1.8b, reported a median total CEO compensation of kr2.5m. This suggests that Kraft Bank remunerates its CEO largely in line with the industry average.

Component	2021	2020	Proportion (2021)
Salary	kr2.2m	kr2.1m	67%
Other	kr1.0m	kr662k	33%
Total Compensation	kr3.2m	kr2.8m	100%

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. In Kraft Bank's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Kraft Bank ASA's Growth

Kraft Bank ASA's earnings per share (EPS) grew 95% per year over the last three years. In the last year, its revenue is up 51%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Kraft Bank ASA Been A Good Investment?

Given the total shareholder loss of 28% over three years, many shareholders in Kraft Bank ASA are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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. We've identified 1 warning sign for Kraft Bank that investors should be aware of in a dynamic business environment.

Important note: Kraft Bank 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.

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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.