Shareholders May Be More Conservative With Kitron ASA's (OB:KIT) CEO Compensation For Now

Key Insights

• Kitron's Annual General Meeting to take place on 25th of April
• Total pay for CEO Lars Nilsson includes €320.5k salary
• Total compensation is 235% above industry average
• Over the past three years, Kitron's EPS grew by 31% and over the past three years, the total shareholder return was 57%

Under the guidance of CEO Lars Nilsson, Kitron ASA (OB:KIT) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 25th of April. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Kitron

How Does Total Compensation For Lars Nilsson Compare With Other Companies In The Industry?

At the time of writing, our data shows that Kitron ASA has a market capitalization of kr6.1b, and reported total annual CEO compensation of €1.9m for the year to December 2023. Notably, that's an increase of 45% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €321k.

In comparison with other companies in the Norwegian Electronic industry with market capitalizations ranging from kr2.2b to kr8.8b, the reported median CEO total compensation was €574k. This suggests that Lars Nilsson is paid more than the median for the industry. What's more, Lars Nilsson holds kr82m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	€321k	€298k	17%
Other	€1.6m	€1.0m	83%
Total Compensation	€1.9m	€1.3m	100%

Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. In Kitron's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Kitron ASA's Growth Numbers

Over the past three years, Kitron ASA has seen its earnings per share (EPS) grow by 31% per year. Its revenue is up 21% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Kitron ASA Been A Good Investment?

We think that the total shareholder return of 57%, over three years, would leave most Kitron ASA shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Kitron that investors should look into moving forward.

Important note: Kitron 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. 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.