We Think Some Shareholders May Hesitate To Increase AKVA group ASA's (OB:AKVA) CEO Compensation

Key Insights

• AKVA group to hold its Annual General Meeting on 22nd of May
• Salary of kr6.12m is part of CEO Knut Nesse's total remuneration
• Total compensation is similar to the industry average
• AKVA group's three-year loss to shareholders was 16% while its EPS grew by 28% over the past three years

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The underwhelming share price performance of AKVA group ASA (OB:AKVA) 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. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 22nd of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for AKVA group

Comparing AKVA group ASA's CEO Compensation With The Industry

At the time of writing, our data shows that AKVA group ASA has a market capitalization of kr2.5b, and reported total annual CEO compensation of kr7.8m for the year to December 2024. That's a notable increase of 29% on last year. In particular, the salary of kr6.12m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Norwegian Machinery industry with market capitalizations ranging between kr1.0b and kr4.2b had a median total CEO compensation of kr6.3m. From this we gather that Knut Nesse is paid around the median for CEOs in the industry. Furthermore, Knut Nesse directly owns kr19m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	kr6.1m	kr5.8m	78%
Other	kr1.7m	kr213k	22%
Total Compensation	kr7.8m	kr6.1m	100%

On an industry level, roughly 80% of total compensation represents salary and 20% is other remuneration. AKVA group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at AKVA group ASA's Growth Numbers

AKVA group ASA has seen its earnings per share (EPS) increase by 28% a year over the past three years. It achieved revenue growth of 12% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 AKVA group ASA Been A Good Investment?

Since shareholders would have lost about 16% over three years, some AKVA group ASA investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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 pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is concerning) in AKVA group we think you should know about.

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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.