We Think Shareholders Will Probably Be Generous With Hafnia Limited's (OB:HAFNI) CEO Compensation

Key Insights

• Hafnia's Annual General Meeting to take place on 10th of July
• Total pay for CEO Mikael Opstun Skov includes US$867.0k salary
• The total compensation is similar to the average for the industry
• Hafnia's EPS grew by 112% over the past three years while total shareholder return over the past three years was 585%

We have been pretty impressed with the performance at Hafnia Limited (OB:HAFNI) recently and CEO Mikael Opstun Skov deserves a mention for their role in it. Coming up to the next AGM on 10th of July, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Hafnia

Comparing Hafnia Limited's CEO Compensation With The Industry

Our data indicates that Hafnia Limited has a market capitalization of kr45b, and total annual CEO compensation was reported as US$2.6m for the year to December 2023. We note that's an increase of 81% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$867k.

In comparison with other companies in the Norwegian Oil and Gas industry with market capitalizations ranging from kr21b to kr67b, the reported median CEO total compensation was US$3.1m. From this we gather that Mikael Opstun Skov is paid around the median for CEOs in the industry. Moreover, Mikael Opstun Skov also holds kr279m worth of Hafnia 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	US$867k	US$867k	33%
Other	US$1.7m	US$567k	67%
Total Compensation	US$2.6m	US$1.4m	100%

Talking in terms of the industry, salary represented approximately 48% of total compensation out of all the companies we analyzed, while other remuneration made up 52% of the pie. Hafnia pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Hafnia Limited's Growth

Hafnia Limited has seen its earnings per share (EPS) increase by 112% a year over the past three years. It achieved revenue growth of 25% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Hafnia Limited Been A Good Investment?

We think that the total shareholder return of 585%, over three years, would leave most Hafnia Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Hafnia (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: Hafnia is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Have 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com