Increases to Borgestad ASA's (OB:BOR) CEO Compensation Might Cool off for now

Key Insights

• Borgestad's Annual General Meeting to take place on 28th of May
• CEO Pal Larsen's total compensation includes salary of kr2.83m
• The overall pay is 136% above the industry average
• Borgestad's three-year loss to shareholders was 23% while its EPS grew by 83% over the past three years

We've discovered 1 warning sign about Borgestad. View them for free.

Shareholders of Borgestad ASA (OB:BOR) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 28th 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 Borgestad

How Does Total Compensation For Pal Larsen Compare With Other Companies In The Industry?

Our data indicates that Borgestad ASA has a market capitalization of kr621m, and total annual CEO compensation was reported as kr3.8m for the year to December 2024. That's a notable increase of 21% on last year. We note that the salary portion, which stands at kr2.83m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Norway Basic Materials industry with market capitalizations below kr2.0b, reported a median total CEO compensation of kr1.6m. Accordingly, our analysis reveals that Borgestad ASA pays Pal Larsen north of the industry median. What's more, Pal Larsen holds kr2.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	kr2.8m	kr2.8m	75%
Other	kr924k	kr309k	25%
Total Compensation	kr3.8m	kr3.1m	100%

Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. Borgestad is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Borgestad ASA's Growth Numbers

Borgestad ASA has seen its earnings per share (EPS) increase by 83% a year over the past three years. Its revenue is up 3.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Borgestad ASA Been A Good Investment?

Since shareholders would have lost about 23% over three years, some Borgestad 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. We've identified 1 warning sign for Borgestad that investors should be aware of in a dynamic business environment.

Switching gears from Borgestad, 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.