Yahoo Finance Is PrairieSky Royalty Ltd.'s (TSE:PSK) CEO Paid At A Competitive Rate?
Andrew Phillips has been the CEO of PrairieSky Royalty Ltd. (TSE:PSK) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for PrairieSky Royalty
How Does Andrew Phillips's Compensation Compare With Similar Sized Companies?
Our data indicates that PrairieSky Royalty Ltd. is worth CA$1.8b, and total annual CEO compensation was reported as CA$4.2m for the year to December 2019. That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at CA$550k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from CA$1.4b to CA$4.5b, and discovered that the median CEO total compensation of that group was CA$3.6m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of PrairieSky Royalty. Speaking on an industry level, we can see that nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. PrairieSky Royalty sets aside a smaller share of compensation for salary, in comparison to the overall industry.
So Andrew Phillips is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. The graphic below shows how CEO compensation at PrairieSky Royalty has changed from year to year.
Is PrairieSky Royalty Ltd. Growing?
PrairieSky Royalty Ltd. has seen earnings per share (EPS) move positively by an average of 19% a year, over the last three years (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.
Has PrairieSky Royalty Ltd. Been A Good Investment?
Given the total loss of 70% over three years, many shareholders in PrairieSky Royalty Ltd. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Andrew Phillips is paid around the same as most CEOs of similar size companies.
We like that the company is growing EPS, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Shifting gears from CEO pay for a second, we've spotted 3 warning signs for PrairieSky Royalty you should be aware of, and 1 of them is potentially serious.
Important note: PrairieSky Royalty may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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. Thank you for reading.
