Yahoo Finance How Should Investors React To Gear Energy Ltd.'s (TSE:GXE) CEO Pay?
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Ingram Gillmore became the CEO of Gear Energy Ltd. (TSE:GXE) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Gear Energy
How Does Ingram Gillmore's Compensation Compare With Similar Sized Companies?
Our data indicates that Gear Energy Ltd. is worth CA$131m, and total annual CEO compensation is CA$333k. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$245k. We examined a group of similar sized companies, with market capitalizations of below CA$261m. The median CEO total compensation in that group is CA$120k.
Thus we can conclude that Ingram Gillmore receives more in total compensation than the median of a group of companies in the same market, and of similar size to Gear Energy Ltd.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Gear Energy, below.
Is Gear Energy Ltd. Growing?
On average over the last three years, Gear Energy Ltd. has grown earnings per share (EPS) by 138% each year (using a line of best fit). In the last year, its revenue is up 10%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Gear Energy Ltd. Been A Good Investment?
Gear Energy Ltd. has generated a total shareholder return of 9.1% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We compared total CEO remuneration at Gear Energy Ltd. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Shareholders may want to check for free if Gear Energy insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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. Thank you for reading.
