Yahoo Finance Why We Think Advantage Energy Ltd.'s (TSE:AAV) CEO Compensation Is Not Excessive At All
Key Insights
Advantage Energy's Annual General Meeting to take place on 14th of May
Salary of CA$441.7k is part of CEO Mike Belenkie's total remuneration
The total compensation is similar to the average for the industry
Over the past three years, Advantage Energy's EPS grew by 6.4% and over the past three years, the total shareholder return was 226%
Performance at Advantage Energy Ltd. (TSE:AAV) has been reasonably good and CEO Mike Belenkie has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 14th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.
Check out our latest analysis for Advantage Energy
Comparing Advantage Energy Ltd.'s CEO Compensation With The Industry
At the time of writing, our data shows that Advantage Energy Ltd. has a market capitalization of CA$1.8b, and reported total annual CEO compensation of CA$2.6m for the year to December 2023. That's a slight decrease of 6.6% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$442k.
On examining similar-sized companies in the Canadian Oil and Gas industry with market capitalizations between CA$1.4b and CA$4.4b, we discovered that the median CEO total compensation of that group was CA$3.3m. This suggests that Advantage Energy remunerates its CEO largely in line with the industry average. What's more, Mike Belenkie holds CA$11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$442k | CA$400k | 17% |
Other | CA$2.1m | CA$2.4m | 83% |
Total Compensation | CA$2.6m | CA$2.8m | 100% |
Talking in terms of the industry, salary represented approximately 37% of total compensation out of all the companies we analyzed, while other remuneration made up 63% of the pie. In Advantage Energy's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Advantage Energy Ltd.'s Growth
Advantage Energy Ltd. has seen its earnings per share (EPS) increase by 6.4% a year over the past three years. It saw its revenue drop 38% over the last year.
We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Advantage Energy Ltd. Been A Good Investment?
Most shareholders would probably be pleased with Advantage Energy Ltd. for providing a total return of 226% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Advantage Energy 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
