We Think Some Shareholders May Hesitate To Increase Akastor ASA's (OB:AKAST) CEO Compensation

Key Insights

• Akastor's Annual General Meeting to take place on 16th of April
• Salary of kr5.11m is part of CEO Karl Kjelstad's total remuneration
• The overall pay is 48% above the industry average
• Over the past three years, Akastor's EPS grew by 1.3% and over the past three years, the total shareholder return was 81%

Performance at Akastor ASA (OB:AKAST) has been reasonably good and CEO Karl Kjelstad has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 16th of April, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Akastor

Comparing Akastor ASA's CEO Compensation With The Industry

Our data indicates that Akastor ASA has a market capitalization of kr3.0b, and total annual CEO compensation was reported as kr8.4m for the year to December 2023. We note that's a decrease of 8.1% compared to last year. We note that the salary portion, which stands at kr5.11m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Norwegian Energy Services industry with market capitalizations ranging between kr1.1b and kr4.3b had a median total CEO compensation of kr5.7m. This suggests that Karl Kjelstad is paid more than the median for the industry. Moreover, Karl Kjelstad also holds kr7.7m worth of Akastor stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	kr5.1m	kr4.9m	61%
Other	kr3.3m	kr4.2m	39%
Total Compensation	kr8.4m	kr9.1m	100%

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. It's interesting to note that Akastor allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Akastor ASA's Growth

Over the past three years, Akastor ASA has seen its earnings per share (EPS) grow by 1.3% per year. Its revenue is up 4.8% over the last year.

We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 Akastor ASA Been A Good Investment?

We think that the total shareholder return of 81%, over three years, would leave most Akastor ASA shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Akastor that investors should be aware of in a dynamic business environment.

Switching gears from Akastor, 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. 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.