Is Philly Shipyard ASA’s (OB:PHLY) CEO Overpaid Relative To Its Peers?

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Steinar Nerbøvik has been the CEO of Philly Shipyard ASA (OB:PHLY) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Philly Shipyard

How Does Steinar Nerbøvik ‘s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Philly Shipyard ASA has a market cap of øre402m, and is paying total annual CEO compensation of US$930k. (This is based on the year to December 2018). We note that’s an increase of 25% above last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$436k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$303k.

As you can see, Steinar Nerbøvik is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Philly Shipyard ASA is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Philly Shipyard, below.

OB:PHLY CEO Compensation, June 17th 2019
OB:PHLY CEO Compensation, June 17th 2019

Is Philly Shipyard ASA Growing?

Philly Shipyard ASA has reduced its earnings per share by an average of 46% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -78%.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Philly Shipyard ASA Been A Good Investment?

Given the total loss of 69% over three years, many shareholders in Philly Shipyard ASA are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We examined the amount Philly Shipyard ASA pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

Over the same period, investors would have come away with nothing in the way of share price gains. This contrasts with the growth in CEO remuneration, year on year. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Philly Shipyard.

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.