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Does BerGenBio ASA's (OB:BGBIO) CEO Pay Reflect Performance?

Richard Godfrey has been the CEO of BerGenBio ASA (OB:BGBIO) since 2008. 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for BerGenBio

How Does Richard Godfrey's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that BerGenBio ASA has a market cap of kr1.1b, and reported total annual CEO compensation of kr4.2m for the year to December 2019. That's just a smallish increase of 7.9% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at kr2.9m. We took a group of companies with market capitalizations below kr2.1b, and calculated the median CEO total compensation to be kr4.1m.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. BerGenBio is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation

So Richard Godfrey receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see, below, how CEO compensation at BerGenBio has changed over time.

OB:BGBIO CEO Compensation April 4th 2020
OB:BGBIO CEO Compensation April 4th 2020

Is BerGenBio ASA Growing?

On average over the last three years, BerGenBio ASA has seen earnings per share (EPS) move in a favourable direction by 10% each year (using a line of best fit). Its revenue is up 281% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has BerGenBio ASA Been A Good Investment?

Given the total loss of 38% over three years, many shareholders in BerGenBio ASA are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Richard Godfrey is paid around the same as most CEOs of similar size companies.

We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. On another note, BerGenBio has 5 warning signs (and 2 which make us uncomfortable) we think you should know about.

If you want to buy a stock that is better than BerGenBio, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.