We Think Some Shareholders May Hesitate To Increase Medistim ASA's (OB:MEDI) CEO Compensation

Key Insights

• Medistim to hold its Annual General Meeting on 8th of May
• Salary of kr3.34m is part of CEO Kari Krogstad's total remuneration
• Total compensation is similar to the industry average
• Medistim's three-year loss to shareholders was 28% while its EPS grew by 4.5% over the past three years

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The underwhelming share price performance of Medistim ASA (OB:MEDI) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 8th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Medistim

How Does Total Compensation For Kari Krogstad Compare With Other Companies In The Industry?

Our data indicates that Medistim ASA has a market capitalization of kr2.9b, and total annual CEO compensation was reported as kr5.4m for the year to December 2024. We note that's a decrease of 25% compared to last year. In particular, the salary of kr3.34m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Norway Medical Equipment industry with market capitalizations between kr1.0b and kr4.2b, we discovered that the median CEO total compensation of that group was kr7.0m. So it looks like Medistim compensates Kari Krogstad in line with the median for the industry. Moreover, Kari Krogstad also holds kr7.6m worth of Medistim stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	kr3.3m	kr3.0m	62%
Other	kr2.1m	kr4.2m	38%
Total Compensation	kr5.4m	kr7.2m	100%

Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. Medistim is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Medistim ASA's Growth Numbers

Medistim ASA's earnings per share (EPS) grew 4.5% per year over the last three years. It achieved revenue growth of 6.7% over the last year.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Medistim ASA Been A Good Investment?

Since shareholders would have lost about 28% over three years, some Medistim ASA investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Medistim that investors should think about before committing capital to this stock.

Switching gears from Medistim, 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.