Here's Why It's Unlikely That Itera ASA's (OB:ITERA) CEO Will See A Pay Rise This Year

Key Insights

• Itera's Annual General Meeting to take place on 27th of May
• CEO Arne Mjøs' total compensation includes salary of kr3.05m
• Total compensation is similar to the industry average
• Itera's EPS declined by 17% over the past three years while total shareholder loss over the past three years was 18%

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The results at Itera ASA (OB:ITERA) have been quite disappointing recently and CEO Arne Mjøs bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 27th of May. 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.

Check out our latest analysis for Itera

How Does Total Compensation For Arne Mjøs Compare With Other Companies In The Industry?

At the time of writing, our data shows that Itera ASA has a market capitalization of kr784m, and reported total annual CEO compensation of kr3.5m for the year to December 2024. This was the same amount the CEO received in the prior year. We note that the salary portion, which stands at kr3.05m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Norwegian IT industry with market capitalizations under kr2.1b, the reported median total CEO compensation was kr3.0m. This suggests that Itera remunerates its CEO largely in line with the industry average. What's more, Arne Mjøs holds kr263m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. Itera pays out 88% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Itera ASA's Growth

Over the last three years, Itera ASA has shrunk its earnings per share by 17% per year. Its revenue is down 2.1% over the previous year.

The decline in EPS is a bit concerning. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Itera ASA Been A Good Investment?

With a three year total loss of 18% for the shareholders, Itera ASA would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Itera that you should be aware of before investing.

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.