Shareholders May Not Be So Generous With Aker ASA's (OB:AKER) CEO Compensation And Here's Why

Key Insights

• Aker will host its Annual General Meeting on 30th of April
• CEO Oyvind Eriksen's total compensation includes salary of kr19.9m
• The overall pay is 159% above the industry average
• Over the past three years, Aker's EPS fell by 55% and over the past three years, the total loss to shareholders 12%

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

In the past three years, shareholders of Aker ASA (OB:AKER) have seen a loss on their investment. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 30th of April and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

See our latest analysis for Aker

Comparing Aker ASA's CEO Compensation With The Industry

At the time of writing, our data shows that Aker ASA has a market capitalization of kr45b, and reported total annual CEO compensation of kr35m for the year to December 2024. That's a fairly small increase of 3.6% over the previous year. We note that the salary of kr19.9m makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the Norway Industrials industry with market capitalizations ranging between kr21b and kr67b had a median total CEO compensation of kr14m. Accordingly, our analysis reveals that Aker ASA pays Oyvind Eriksen north of the industry median. Furthermore, Oyvind Eriksen directly owns kr131m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 49% of total compensation out of all the companies we analyzed, while other remuneration made up 51% of the pie. It's interesting to note that Aker pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Aker ASA's Growth Numbers

Aker ASA has reduced its earnings per share by 55% a year over the last three years. Its revenue is up 92% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Aker ASA Been A Good Investment?

Since shareholders would have lost about 12% over three years, some Aker ASA investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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 did our research and spotted 1 warning sign for Aker that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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

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.