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Kolibri Global Energy Inc. (TSE:KEI) has not performed well recently and CEO Wolf Regener will probably need to up their game. At the upcoming AGM on 28 July 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Comparing Kolibri Global Energy Inc.'s CEO Compensation With the industry
Our data indicates that Kolibri Global Energy Inc. has a market capitalization of CA$20m, and total annual CEO compensation was reported as US$326k for the year to December 2020. Notably, that's a decrease of 16% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth US$326k.
For comparison, other companies in the industry with market capitalizations below CA$251m, reported a median total CEO compensation of US$195k. Accordingly, our analysis reveals that Kolibri Global Energy Inc. pays Wolf Regener north of the industry median. What's more, Wolf Regener holds CA$200k worth of shares in the company in their own name.
Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. At the company level, Kolibri Global Energy pays Wolf Regener solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Kolibri Global Energy Inc.'s Growth
Over the last three years, Kolibri Global Energy Inc. has shrunk its earnings per share by 91% per year. It saw its revenue drop 39% over the last year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Kolibri Global Energy Inc. Been A Good Investment?
Few Kolibri Global Energy Inc. shareholders would feel satisfied with the return of -80% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
Kolibri Global Energy rewards its CEO solely through a salary, ignoring non-salary benefits completely. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Kolibri Global Energy (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Important note: Kolibri Global Energy 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.
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