American Shipping Company ASA's (OB:AMSC) CEO Compensation Is Looking A Bit Stretched At The Moment

CEO Pål Magnussen has done a decent job of delivering relatively good performance at American Shipping Company ASA (OB:AMSC) 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 20 April 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for American Shipping

How Does Total Compensation For Pål Magnussen Compare With Other Companies In The Industry?

At the time of writing, our data shows that American Shipping Company ASA has a market capitalization of kr1.8b, and reported total annual CEO compensation of US$545k for the year to December 2020. Notably, that's an increase of 13% over the year before. In particular, the salary of US$359.6k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from kr849m to kr3.4b, we found that the median CEO total compensation was US$291k. Accordingly, our analysis reveals that American Shipping Company ASA pays Pål Magnussen north of the industry median. What's more, Pål Magnussen holds kr2.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$360k	US$344k	66%
Other	US$185k	US$138k	34%
Total Compensation	US$545k	US$481k	100%

On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. American Shipping is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at American Shipping Company ASA's Growth Numbers

American Shipping Company ASA's earnings per share (EPS) grew 11% per year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 American Shipping Company ASA Been A Good Investment?

Boasting a total shareholder return of 47% over three years, American Shipping Company ASA has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for American Shipping that investors should think about before committing capital to this stock.

Switching gears from American Shipping, 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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