Key Insights
- Tomra Systems to hold its Annual General Meeting on 6th of May
- Total pay for CEO Tove Andersen includes €480.9k salary
- The total compensation is 43% less than the average for the industry
- Tomra Systems' three-year loss to shareholders was 9.6% while its EPS was down 4.8% over the past three years
The disappointing performance at Tomra Systems ASA (OB:TOM) will make some shareholders rather disheartened. The next AGM coming up on 6th of May will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.
View our latest analysis for Tomra Systems
How Does Total Compensation For Tove Andersen Compare With Other Companies In The Industry?
Our data indicates that Tomra Systems ASA has a market capitalization of kr46b, and total annual CEO compensation was reported as €1.2m for the year to December 2024. That's a slight decrease of 4.1% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €481k.
In comparison with other companies in the Norwegian Machinery industry with market capitalizations ranging from kr21b to kr66b, the reported median CEO total compensation was €2.1m. This suggests that Tove Andersen is paid below the industry median. Moreover, Tove Andersen also holds kr8.0m worth of Tomra Systems stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | €481k | €482k | 40% |
| Other | €716k | €767k | 60% |
| Total Compensation | €1.2m | €1.2m | 100% |
On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. Tomra Systems sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Tomra Systems ASA's Growth Numbers
Over the last three years, Tomra Systems ASA has shrunk its earnings per share by 4.8% per year. In the last year, its revenue is up 4.6%.
The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Tomra Systems ASA Been A Good Investment?
Since shareholders would have lost about 9.6% over three years, some Tomra Systems ASA investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Tomra Systems that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
Valuation is complex, but we're here to simplify it.
Discover if Tomra Systems might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.