Yahoo Finance Enerflex Ltd.'s (TSE:EFX) CEO Compensation Is Looking A Bit Stretched At The Moment
Key Insights
Enerflex's Annual General Meeting to take place on 7th of May
Salary of CA$850.0k is part of CEO Marc Rossiter's total remuneration
The overall pay is 44% above the industry average
Enerflex's EPS declined by 103% over the past three years while total shareholder return over the past three years was 0.2%
Under the guidance of CEO Marc Rossiter, Enerflex Ltd. (TSE:EFX) has performed reasonably well recently. As shareholders go into the upcoming AGM on 7th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
View our latest analysis for Enerflex
How Does Total Compensation For Marc Rossiter Compare With Other Companies In The Industry?
According to our data, Enerflex Ltd. has a market capitalization of CA$998m, and paid its CEO total annual compensation worth CA$6.5m over the year to December 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$850k.
On comparing similar companies from the Canadian Energy Services industry with market caps ranging from CA$551m to CA$2.2b, we found that the median CEO total compensation was CA$4.5m. This suggests that Marc Rossiter is paid more than the median for the industry. What's more, Marc Rossiter holds CA$2.1m 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 | CA$850k | CA$800k | 13% |
Other | CA$5.6m | CA$5.6m | 87% |
Total Compensation | CA$6.5m | CA$6.4m | 100% |
Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. Enerflex pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Enerflex Ltd.'s Growth Numbers
Over the last three years, Enerflex Ltd. has shrunk its earnings per share by 103% per year. It achieved revenue growth of 78% over the last year.
Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Enerflex Ltd. Been A Good Investment?
Enerflex Ltd. has generated a total shareholder return of 0.2% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
In Summary...
The overall company performance has been commendable, however there are still areas for improvement. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Enerflex that investors should think about before committing capital to this stock.
Important note: Enerflex 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.
