Does Dolphin Drilling ASA’s (OB:DDASA) CEO Pay Reflect Performance?

In 2009 Ivar Brandvold was appointed CEO of Dolphin Drilling ASA (OB:DDASA). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

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How Does Ivar Brandvold’s Compensation Compare With Similar Sized Companies?

According to our data, Dolphin Drilling ASA has a market capitalization of øre107m, and pays its CEO total annual compensation worth US$722k. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$644k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$317k.

Thus we can conclude that Ivar Brandvold receives more in total compensation than the median of a group of companies in the same market, and of similar size to Dolphin Drilling ASA. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. So this free report on the analyst consensus forecasts could help you make a master move on this stock.

You can see, below, how CEO compensation at Dolphin Drilling has changed over time.

OB:DDASA CEO Compensation January 16th 19
OB:DDASA CEO Compensation January 16th 19

Is Dolphin Drilling ASA Growing?

Over the last three years Dolphin Drilling ASA has shrunk its earnings per share by an average of 13% per year. In the last year, its revenue is down -60%.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

Has Dolphin Drilling ASA Been A Good Investment?

With a three year total loss of 93%, Dolphin Drilling ASA would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We examined the amount Dolphin Drilling ASA pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

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

Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Dolphin Drilling shares (free trial).

Important note: Dolphin Drilling 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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.