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Lars Solbakken became the CEO of Ocean Yield ASA (OB:OCY) in 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Lars Solbakken’s Compensation Compare With Similar Sized Companies?
Our data indicates that Ocean Yield ASA is worth øre9.0b, and total annual CEO compensation is US$1.5m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$509k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$605k.
Thus we can conclude that Lars Solbakken receives more in total compensation than the median of a group of companies in the same market, and of similar size to Ocean Yield ASA. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Ocean Yield has changed over time.
Is Ocean Yield ASA Growing?
Ocean Yield ASA has reduced its earnings per share by an average of 9.0% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -11% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Ocean Yield ASA Been A Good Investment?
Ocean Yield ASA has served shareholders reasonably well, with a total return of 11% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount Ocean Yield 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.
While shareholder returns are acceptable, they don’t delight. So we think more research is needed, but we don’t think the CEO underpaid. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Ocean Yield.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.