Storebrand ASA's (OB:STB) CEO Compensation Looks Acceptable To Us And Here's Why

Shareholders may be wondering what CEO Odd Grefstad plans to do to improve the less than great performance at Storebrand ASA (OB:STB) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 08 April 2021. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Storebrand

How Does Total Compensation For Odd Grefstad Compare With Other Companies In The Industry?

Our data indicates that Storebrand ASA has a market capitalization of kr40b, and total annual CEO compensation was reported as kr9.0m for the year to December 2020. That's a modest increase of 7.0% on the prior year. We note that the salary portion, which stands at kr7.37m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from kr17b to kr55b, the reported median CEO total compensation was kr15m. This suggests that Odd Grefstad is paid below the industry median. Moreover, Odd Grefstad also holds kr19m worth of Storebrand stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	kr7.4m	kr6.9m	82%
Other	kr1.7m	kr1.5m	18%
Total Compensation	kr9.0m	kr8.4m	100%

On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. Storebrand is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Storebrand ASA's Growth

Storebrand ASA has reduced its earnings per share by 1.7% a year over the last three years. It saw its revenue drop 6.8% over the last year.

The lack of EPS growth is certainly uninspiring. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Storebrand ASA Been A Good Investment?

Most shareholders would probably be pleased with Storebrand ASA for providing a total return of 48% 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...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which makes us a bit uncomfortable) in Storebrand we think you should know about.

Important note: Storebrand 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. 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.
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