Yahoo Finance Is TAG Oil Ltd.'s (TSE:TAO) CEO Pay Justified?
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In 2015 Toby Pierce was appointed CEO of TAG Oil Ltd. (TSE:TAO). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for TAG Oil
How Does Toby Pierce's Compensation Compare With Similar Sized Companies?
According to our data, TAG Oil Ltd. has a market capitalization of CA$29m, and pays its CEO total annual compensation worth CA$270k. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$240k. We examined a group of similar sized companies, with market capitalizations of below CA$268m. The median CEO total compensation in that group is CA$150k.
It would therefore appear that TAG Oil Ltd. pays Toby Pierce more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at TAG Oil has changed over time.
Is TAG Oil Ltd. Growing?
Over the last three years TAG Oil Ltd. has grown its earnings per share (EPS) by an average of 64% per year (using a line of best fit). Its revenue is up 33% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has TAG Oil Ltd. Been A Good Investment?
Given the total loss of 59% over three years, many shareholders in TAG Oil Ltd. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We examined the amount TAG Oil Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at TAG Oil.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.
