Jostein Alendal has been the CEO of Reach Subsea ASA (OB:REACH) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jostein Alendal’s Compensation Compare With Similar Sized Companies?
According to our data, Reach Subsea ASA has a market capitalization of øre342m, and pays its CEO total annual compensation worth øre1.4m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at øre1.3m. We took a group of companies with market capitalizations below øre1.7b, and calculated the median CEO compensation to be øre2.7m.
Most shareholders would consider it a positive that Jostein Alendal takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Reach Subsea, below.
Is Reach Subsea ASA Growing?
Over the last three years Reach Subsea ASA has shrunk its earnings per share by an average of 40% per year. In the last year, its revenue is up 90%.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.
Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Reach Subsea ASA Been A Good Investment?
Reach Subsea ASA has served shareholders reasonably well, with a total return of 21% over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Reach Subsea ASA is currently paying its CEO below what is normal for companies of its size.
Jostein Alendal is paid less than what is normal at similar size companies, and but overall performance has left me uninspired. However I do not find the CEO compensation to be concerning. Whatever your view on compensation, you might want to check if insiders are buying or selling Reach Subsea shares (free trial).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
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 email@example.com.