U.S. Markets closed

Is Altima Resources Ltd.'s (CVE:ARH) CEO Paid Enough Relative To Peers?

Simply Wall St

Joe Edward DeVries has been the CEO of Altima Resources Ltd. (CVE:ARH) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

View our latest analysis for Altima Resources

How Does Joe Edward DeVries's Compensation Compare With Similar Sized Companies?

Our data indicates that Altima Resources Ltd. is worth CA$1.0m, and total annual CEO compensation was reported as CA$114k for the year to November 2018. We think total compensation is more important but we note that the CEO salary is lower, at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined a group of similar sized companies, with market capitalizations of below CA$260m. The median CEO total compensation in that group is CA$223k.

A first glance this seems like a real positive for shareholders, since Joe Edward DeVries is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Altima Resources has changed from year to year.

TSXV:ARH CEO Compensation, January 5th 2020

Is Altima Resources Ltd. Growing?

Over the last three years Altima Resources Ltd. has grown its earnings per share (EPS) by an average of 94% per year (using a line of best fit). In the last year, its revenue is down 78%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Altima Resources Ltd. Been A Good Investment?

Since shareholders would have lost about 80% over three years, some Altima Resources Ltd. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

It appears that Altima Resources Ltd. remunerates its CEO below most similar sized companies.

Since the business is growing, many would argue this suggests the pay is modest. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. We're not critical of the remuneration Joe Edward DeVries receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. So you may want to check if insiders are buying Altima Resources shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.