A Quick Analysis On Kongsberg Gruppen's (OB:KOG) CEO Compensation

Geir Haoy has been the CEO of Kongsberg Gruppen ASA (OB:KOG) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Kongsberg Gruppen.

View our latest analysis for Kongsberg Gruppen

How Does Total Compensation For Geir Haoy Compare With Other Companies In The Industry?

At the time of writing, our data shows that Kongsberg Gruppen ASA has a market capitalization of kr25b, and reported total annual CEO compensation of kr10m for the year to December 2019. We note that's an increase of 17% above last year. We note that the salary portion, which stands at kr5.50m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between kr19b and kr61b, we discovered that the median CEO total compensation of that group was kr53m. Accordingly, Kongsberg Gruppen pays its CEO under the industry median. Furthermore, Geir Haoy directly owns kr5.0m 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 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. According to our research, Kongsberg Gruppen has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Kongsberg Gruppen ASA's Growth

Kongsberg Gruppen ASA has seen its earnings per share (EPS) increase by 25% a year over the past three years. In the last year, its revenue is up 62%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Kongsberg Gruppen ASA Been A Good Investment?

Kongsberg Gruppen ASA has generated a total shareholder return of 29% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we noted earlier, Kongsberg Gruppen pays its CEO lower than the norm for similar-sized companies belonging to the same industry. At the same time, EPS growth has been exceptional over the past three years. Shareholder returns, in comparison, have not been as impressive. Shareholder returns could be better but we're pleased with the positive EPS growth. So considering these factors, we think Geir is modestly compensated.

Shareholders may want to check for free if Kongsberg Gruppen insiders are buying or selling shares.

Switching gears from Kongsberg Gruppen, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

If you’re looking to trade Kongsberg Gruppen, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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