This Is The Reason Why We Think Reach Subsea ASA's (OB:REACH) CEO Deserves A Bump Up To Their Compensation

Key Insights

• Reach Subsea's Annual General Meeting to take place on 28th of May
• Salary of kr2.39m is part of CEO Jostein Alendal's total remuneration
• The total compensation is 59% less than the average for the industry
• Over the past three years, Reach Subsea's EPS grew by 35% and over the past three years, the total shareholder return was 136%

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Shareholders will be pleased by the impressive results for Reach Subsea ASA (OB:REACH) recently and CEO Jostein Alendal has played a key role. At the upcoming AGM on 28th of May, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for Reach Subsea

Comparing Reach Subsea ASA's CEO Compensation With The Industry

According to our data, Reach Subsea ASA has a market capitalization of kr2.5b, and paid its CEO total annual compensation worth kr3.3m over the year to December 2024. That's mostly flat as compared to the prior year's compensation. In particular, the salary of kr2.39m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Norwegian Energy Services industry with market capitalizations ranging from kr1.0b to kr4.1b, the reported median CEO total compensation was kr8.1m. In other words, Reach Subsea pays its CEO lower than the industry median. What's more, Jostein Alendal holds kr1.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. Although there is a difference in how total compensation is set, Reach Subsea more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Reach Subsea ASA's Growth

Reach Subsea ASA has seen its earnings per share (EPS) increase by 35% a year over the past three years. Its revenue is up 22% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Reach Subsea ASA Been A Good Investment?

Most shareholders would probably be pleased with Reach Subsea ASA for providing a total return of 136% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Reach Subsea that investors should look into moving forward.

Switching gears from Reach Subsea, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.