It Looks Like The CEO Of Subsea 7 S.A. (OB:SUBC) May Be Underpaid Compared To Peers

Key Insights

• Subsea 7's Annual General Meeting to take place on 2nd of May
• Salary of US$708.0k is part of CEO John Evans's total remuneration
• The total compensation is 81% less than the average for the industry
• Subsea 7's total shareholder return over the past three years was 123% while its EPS grew by 137% over the past three years

Shareholders will be pleased by the impressive results for Subsea 7 S.A. (OB:SUBC) recently and CEO John Evans has played a key role. This would be kept in mind at the upcoming AGM on 2nd of May which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Subsea 7

Comparing Subsea 7 S.A.'s CEO Compensation With The Industry

Our data indicates that Subsea 7 S.A. has a market capitalization of kr54b, and total annual CEO compensation was reported as US$1.5m for the year to December 2023. We note that's an increase of 8.2% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$708k.

For comparison, other companies in the Norwegian Energy Services industry with market capitalizations ranging between kr44b and kr132b had a median total CEO compensation of US$8.0m. In other words, Subsea 7 pays its CEO lower than the industry median. What's more, John Evans holds kr20m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$708k	US$656k	46%
Other	US$834k	US$769k	54%
Total Compensation	US$1.5m	US$1.4m	100%

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. In Subsea 7's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

Subsea 7 S.A.'s Growth

Subsea 7 S.A.'s earnings per share (EPS) grew 137% per year over the last three years. It achieved revenue growth of 18% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Subsea 7 S.A. Been A Good Investment?

Boasting a total shareholder return of 123% over three years, Subsea 7 S.A. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

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. That's why we did some digging and identified 1 warning sign for Subsea 7 that investors should think about before committing capital to this stock.

Important note: Subsea 7 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.

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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.