In 2016 Kristian Johansen was appointed CEO of TGS-NOPEC Geophysical Company ASA (OB:TGS). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Kristian Johansen’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that TGS-NOPEC Geophysical Company ASA has a market cap of kr25b, and is paying total annual CEO compensation of US$2.2m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$558k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$940k.
As you can see, Kristian Johansen is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean TGS-NOPEC Geophysical Company ASA is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at TGS-NOPEC Geophysical, below.
Is TGS-NOPEC Geophysical Company ASA Growing?
TGS-NOPEC Geophysical Company ASA has increased its earnings per share (EPS) by an average of 89% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 21%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
Has TGS-NOPEC Geophysical Company ASA Been A Good Investment?
I think that the total shareholder return of 57%, over three years, would leave most TGS-NOPEC Geophysical Company ASA shareholders smiling. 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 examined the amount TGS-NOPEC Geophysical Company 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.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying TGS-NOPEC Geophysical shares with their own money (free access).
Important note: TGS-NOPEC Geophysical may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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