Shareholders May Be Wary Of Increasing Selvaag Bolig ASA's (OB:SBO) CEO Compensation Package

Key Insights

• Selvaag Bolig will host its Annual General Meeting on 24th of April
• CEO Sverre Molvik's total compensation includes salary of kr4.12m
• The overall pay is 49% above the industry average
• Selvaag Bolig's three-year loss to shareholders was 9.5% while its EPS was down 30% over the past three years

We've discovered 2 warning signs about Selvaag Bolig. View them for free.

Selvaag Bolig ASA (OB:SBO) has not performed well recently and CEO Sverre Molvik will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 24th of April. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Selvaag Bolig

Comparing Selvaag Bolig ASA's CEO Compensation With The Industry

At the time of writing, our data shows that Selvaag Bolig ASA has a market capitalization of kr3.4b, and reported total annual CEO compensation of kr9.6m for the year to December 2024. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at kr4.1m.

For comparison, other companies in the Norwegian Real Estate industry with market capitalizations ranging between kr2.1b and kr8.4b had a median total CEO compensation of kr6.5m. This suggests that Sverre Molvik is paid more than the median for the industry. Moreover, Sverre Molvik also holds kr21m worth of Selvaag Bolig 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	kr4.1m	kr4.0m	43%
Other	kr5.5m	kr5.4m	57%
Total Compensation	kr9.6m	kr9.4m	100%

Speaking on an industry level, nearly 96% of total compensation represents salary, while the remainder of 4% is other remuneration. In Selvaag Bolig's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Selvaag Bolig ASA's Growth

Selvaag Bolig ASA has reduced its earnings per share by 30% a year over the last three years. Its revenue is down 40% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Selvaag Bolig ASA Been A Good Investment?

Given the total shareholder loss of 9.5% over three years, many shareholders in Selvaag Bolig ASA are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Selvaag Bolig (1 is a bit concerning!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.