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A Quick Analysis On Petrus Resources' (TSE:PRQ) CEO Compensation

Neil Korchinski became the CEO of Petrus Resources Ltd. (TSE:PRQ) in 2016, 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 assess whether Petrus Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Petrus Resources

How Does Total Compensation For Neil Korchinski Compare With Other Companies In The Industry?

Our data indicates that Petrus Resources Ltd. has a market capitalization of CA$9.4m, and total annual CEO compensation was reported as CA$381k for the year to December 2019. That's a notable decrease of 8.2% on last year. We note that the salary portion, which stands at CA$275.0k constitutes the majority of total compensation received by the CEO.

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For comparison, other companies in the industry with market capitalizations below CA$261m, reported a median total CEO compensation of CA$319k. From this we gather that Neil Korchinski is paid around the median for CEOs in the industry.

Component

2019

2018

Proportion (2019)

Salary

CA$275k

CA$275k

72%

Other

CA$106k

CA$140k

28%

Total Compensation

CA$381k

CA$415k

100%

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. Petrus Resources pays out 72% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

Petrus Resources Ltd.'s Growth

Petrus Resources Ltd.'s earnings per share (EPS) grew 13% per year over the last three years. It saw its revenue drop 23% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Petrus Resources Ltd. Been A Good Investment?

Since shareholders would have lost about 92% over three years, some Petrus Resources Ltd. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Petrus Resources Ltd. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, the company has logged negative shareholder returns over the previous three years. But on the bright side, EPS growth is positive over the same period. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Petrus Resources that investors should look into moving forward.

Important note: Petrus Resources is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.