Most Shareholders Will Probably Find That The Compensation For Nordic Halibut AS' (OB:NOHAL) CEO Is Reasonable

Key Insights

• Nordic Halibut to hold its Annual General Meeting on 30th of May
• Total pay for CEO Edvard Henden includes kr1.79m salary
• Total compensation is 47% below industry average
• Nordic Halibut's three-year loss to shareholders was 22% while its EPS grew by 0.6% over the past three years

Shareholders may be wondering what CEO Edvard Henden plans to do to improve the less than great performance at Nordic Halibut AS (OB:NOHAL) recently. At the next AGM coming up on 30th of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

Check out our latest analysis for Nordic Halibut

Comparing Nordic Halibut AS' CEO Compensation With The Industry

According to our data, Nordic Halibut AS has a market capitalization of kr868m, and paid its CEO total annual compensation worth kr1.9m over the year to December 2023. That's a notable increase of 21% on last year. Notably, the salary which is kr1.79m, represents most of the total compensation being paid.

In comparison with other companies in the Norwegian Food industry with market capitalizations under kr2.1b, the reported median total CEO compensation was kr3.6m. This suggests that Edvard Henden is paid below the industry median.

Component	2023	2022	Proportion (2023)
Salary	kr1.8m	kr1.5m	94%
Other	kr109k	kr74k	6%
Total Compensation	kr1.9m	kr1.6m	100%

Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. Nordic Halibut pays out 94% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Nordic Halibut AS' Growth

Over the last three years, Nordic Halibut AS has not seen its earnings per share change much, though there is a slight positive movement. In the last year, its revenue is up 27%.

It's hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Nordic Halibut AS Been A Good Investment?

Since shareholders would have lost about 22% over three years, some Nordic Halibut AS investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. The lacklustre earnings growth perhaps may have something to do with the downward trend in the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Nordic Halibut (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.