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In 2010 Simen Lieungh was appointed CEO of Odfjell Drilling Ltd. (OB:ODL). 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Simen Lieungh’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Odfjell Drilling Ltd. has a market cap of øre6.1b, and is paying total annual CEO compensation of US$1.0m. (This is based on the year to December 2018). Notably, that’s an increase of 28% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$672k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$590k.
Thus we can conclude that Simen Lieungh receives more in total compensation than the median of a group of companies in the same market, and of similar size to Odfjell Drilling Ltd.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Odfjell Drilling has changed from year to year.
Is Odfjell Drilling Ltd. Growing?
Odfjell Drilling Ltd. has increased its earnings per share (EPS) by an average of 107% a year, over the last three years (using a line of best fit). It achieved revenue growth of 5.3% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Odfjell Drilling Ltd. Been A Good Investment?
Most shareholders would probably be pleased with Odfjell Drilling Ltd. for providing a total return of 422% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared total CEO remuneration at Odfjell Drilling Ltd. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Odfjell Drilling (free visualization of insider trades).
If you want to buy a stock that is better than Odfjell Drilling, this free list of high return, low debt companies is a great place to look.
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.