Phil Hodge became the CEO of Pine Cliff Energy Ltd. (TSE:PNE) in 2012, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Pine Cliff Energy.
Comparing Pine Cliff Energy Ltd.'s CEO Compensation With the industry
Our data indicates that Pine Cliff Energy Ltd. has a market capitalization of CA$75m, and total annual CEO compensation was reported as CA$454k for the year to December 2019. That is, the compensation was roughly the same as last year. Notably, the salary which is CA$315.0k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below CA$264m, reported a median total CEO compensation of CA$363k. So it looks like Pine Cliff Energy compensates Phil Hodge in line with the median for the industry. What's more, Phil Hodge holds CA$1.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. According to our research, Pine Cliff Energy has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Pine Cliff Energy Ltd.'s Growth
Over the last three years, Pine Cliff Energy Ltd. has shrunk its earnings per share by 10% per year. Its revenue is down 12% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Pine Cliff Energy Ltd. Been A Good Investment?
Since shareholders would have lost about 66% over three years, some Pine Cliff Energy Ltd. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Pine Cliff Energy pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Pine Cliff Energy you should be aware of, and 1 of them can't be ignored.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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