Geir Drangsland is the CEO of Byggma ASA (OB:BMA). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Geir Drangsland's Compensation Compare With Similar Sized Companies?
According to our data, Byggma ASA has a market capitalization of kr622m, and paid its CEO total annual compensation worth kr4.1m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr3.2m. We examined a group of similar sized companies, with market capitalizations of below kr1.8b. The median CEO total compensation in that group is kr3.7m.
So Geir Drangsland receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Byggma has changed from year to year.
Is Byggma ASA Growing?
Over the last three years Byggma ASA has shrunk its earnings per share by an average of 1.9% per year (measured with a line of best fit). It achieved revenue growth of 11% over the last year.
In the last three years the company has failed to grow earnings per share. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Byggma ASA Been A Good Investment?
With a total shareholder return of 27% over three years, Byggma ASA shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Geir Drangsland is paid around the same as most CEOs of similar size companies.
We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We're not saying the CEO pay is too generous, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. Whatever your view on compensation, you might want to check if insiders are buying or selling Byggma shares (free trial).
Important note: Byggma may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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