George Fink has been the CEO of Bonterra Energy Corp. (TSE:BNE) since 1981, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For George Fink Compare With Other Companies In The Industry?
At the time of writing, our data shows that Bonterra Energy Corp. has a market capitalization of CA$55m, and reported total annual CEO compensation of CA$375k for the year to December 2019. We note that's a small decrease of 6.6% on last year. Notably, the salary which is CA$307.5k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under CA$267m, the reported median total CEO compensation was CA$375k. From this we gather that George Fink is paid around the median for CEOs in the industry. Furthermore, George Fink directly owns CA$7.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. According to our research, Bonterra Energy has allocated a higher percentage of pay to salary in comparison to the wider industry. 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 Bonterra Energy Corp.'s Growth Numbers
Bonterra Energy Corp. has reduced its earnings per share by 95% a year over the last three years. In the last year, its revenue is down 8.0%.
The decline in earnings is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Bonterra Energy Corp. Been A Good Investment?
Since shareholders would have lost about 88% over three years, some Bonterra Energy Corp. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, George is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining earnings growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 2 which can't be ignored) in Bonterra Energy we think you should know about.
Switching gears from Bonterra Energy, 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.
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. 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.
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