Here's What We Think About Kongsberg Gruppen's (OB:KOG) CEO Pay

By
Simply Wall St
Published
December 29, 2020
OB:KOG

This article will reflect on the compensation paid to Geir Haoy who has served as CEO of Kongsberg Gruppen ASA (OB:KOG) since 2016. This analysis will also assess whether Kongsberg Gruppen pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Kongsberg Gruppen

Comparing Kongsberg Gruppen ASA's CEO Compensation With the industry

According to our data, Kongsberg Gruppen ASA has a market capitalization of kr32b, and paid its CEO total annual compensation worth kr10m over 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.

For comparison, other companies in the same industry with market capitalizations ranging between kr17b and kr55b had a median total CEO compensation of kr19m. In other words, Kongsberg Gruppen pays its CEO lower than the industry median. Furthermore, Geir Haoy directly owns kr6.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20192018Proportion (2019)
Salary kr5.5m kr5.2m 53%
Other kr4.9m kr3.7m 47%
Total Compensationkr10m kr8.9m100%

On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. According to our research, Kongsberg Gruppen has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
OB:KOG CEO Compensation December 30th 2020

A Look at Kongsberg Gruppen ASA's Growth Numbers

Kongsberg Gruppen ASA has seen its earnings per share (EPS) increase by 17% a year over the past three years. Its revenue is up 40% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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?

Boasting a total shareholder return of 51% over three years, Kongsberg Gruppen ASA has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As previously discussed, Geir is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Considering robust EPS growth, we believe Geir to be modestly paid. Given the strong history of shareholder returns, the shareholders are probably very happy with Geir's performance.

Whatever your view on compensation, you might want to check if insiders are buying or selling Kongsberg Gruppen shares (free trial).

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.

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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.
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