Yahoo Finance What Can We Learn About Tourmaline Oil's (TSE:TOU) CEO Compensation?
This article will reflect on the compensation paid to Mike Rose who has served as CEO of Tourmaline Oil Corp. (TSE:TOU) since 2008. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Tourmaline Oil
Comparing Tourmaline Oil Corp.'s CEO Compensation With the industry
At the time of writing, our data shows that Tourmaline Oil Corp. has a market capitalization of CA$4.7b, and reported total annual CEO compensation of CA$3.4m for the year to December 2019. That's a fairly small increase of 7.0% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$600k.
On comparing similar companies from the same industry with market caps ranging from CA$2.6b to CA$8.2b, we found that the median CEO total compensation was CA$5.3m. In other words, Tourmaline Oil pays its CEO lower than the industry median. Furthermore, Mike Rose directly owns CA$275m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | CA$600k | CA$600k | 18% |
Other | CA$2.8m | CA$2.6m | 82% |
Total Compensation | CA$3.4m | CA$3.2m | 100% |
Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. Tourmaline Oil sets aside a smaller share of compensation for salary, in comparison to the overall 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 Tourmaline Oil Corp.'s Growth Numbers
Over the last three years, Tourmaline Oil Corp. has shrunk its earnings per share by 46% per year. It achieved revenue growth of 24% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Tourmaline Oil Corp. Been A Good Investment?
Given the total shareholder loss of 17% over three years, many shareholders in Tourmaline Oil Corp. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we noted earlier, Tourmaline Oil pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But shareholder returns and EPS growth over the past three years are negative, which is cause for concern. In contrast, revenues have increased more recently. Although it's fair to say CEO compensation is modest, shareholders might want to see healthier investor returns before thinking Mike deserves a raise.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Tourmaline Oil that investors should be aware of in a dynamic business environment.
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.
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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