Is New Zealand Energy Corp.'s (CVE:NZ) CEO Pay Fair?
In 2015 Mike Adams was appointed CEO of New Zealand Energy Corp. (CVE:NZ). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for New Zealand Energy
How Does Mike Adams's Compensation Compare With Similar Sized Companies?
Our data indicates that New Zealand Energy Corp. is worth CA$2.3m, and total annual CEO compensation was reported as CA$411k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$387k. We took a group of companies with market capitalizations below CA$265m, and calculated the median CEO total compensation to be CA$161k.
Thus we can conclude that Mike Adams receives more in total compensation than the median of a group of companies in the same market, and of similar size to New Zealand Energy Corp.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at New Zealand Energy, below.
Is New Zealand Energy Corp. Growing?
On average over the last three years, New Zealand Energy Corp. has grown earnings per share (EPS) by 42% each year (using a line of best fit). It achieved revenue growth of 4.9% over the last year.
This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has New Zealand Energy Corp. Been A Good Investment?
Given the total loss of 71% over three years, many shareholders in New Zealand Energy Corp. 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 compared the total CEO remuneration paid by New Zealand Energy Corp., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying New Zealand Energy shares with their own money (free access).
If you want to buy a stock that is better than New Zealand Energy, this free list of high return, low debt companies is a great place to look.
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.
