Luis Antonio Gomes Araujo became the CEO of Aker Solutions ASA (OB:AKSO) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Luis Antonio Gomes Araujo’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Aker Solutions ASA has a market cap of kr7.4b, and is paying total annual CEO compensation of kr15m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at kr7.4m. When we examined a selection of companies with market caps ranging from kr3.6b to kr15b, we found the median CEO total compensation was kr5.1m.
It would therefore appear that Aker Solutions ASA pays Luis Antonio Gomes Araujo more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Aker Solutions has changed over time.
Is Aker Solutions ASA Growing?
Aker Solutions ASA has increased its earnings per share (EPS) by an average of 65% a year, over the last three years (using a line of best fit). It achieved revenue growth of 20% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.
Has Aker Solutions ASA Been A Good Investment?
Since shareholders would have lost about 23% over three years, some Aker Solutions ASA shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Aker Solutions ASA with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Aker Solutions shares (free trial).
Important note: Aker Solutions may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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