Shareholders Will Probably Hold Off On Increasing Philly Shipyard ASA's (OB:PHLY) CEO Compensation For The Time Being

Under the guidance of CEO Steinar Nerbøvik, Philly Shipyard ASA (OB:PHLY) has performed reasonably well recently. As shareholders go into the upcoming AGM on 21 April 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Philly Shipyard

Comparing Philly Shipyard ASA's CEO Compensation With the industry

Our data indicates that Philly Shipyard ASA has a market capitalization of kr797m, and total annual CEO compensation was reported as US$663k for the year to December 2020. That's a notable decrease of 24% on last year. We note that the salary portion, which stands at US$452.8k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below kr1.7b, reported a median total CEO compensation of US$365k. Accordingly, our analysis reveals that Philly Shipyard ASA pays Steinar Nerbøvik north of the industry median.

Component	2020	2019	Proportion (2020)
Salary	US$453k	US$436k	68%
Other	US$210k	US$437k	32%
Total Compensation	US$663k	US$873k	100%

Speaking on an industry level, nearly 52% of total compensation represents salary, while the remainder of 48% is other remuneration. Philly Shipyard is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Philly Shipyard ASA's Growth

Philly Shipyard ASA has reduced its earnings per share by 71% a year over the last three years. Its revenue is up 93% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Philly Shipyard ASA Been A Good Investment?

Philly Shipyard ASA has generated a total shareholder return of 6.9% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.

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 makes us a bit uncomfortable) in Philly Shipyard we think you should know about.

Switching gears from Philly Shipyard, 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.

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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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