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Is Bonterra Energy Corp.'s (TSE:BNE) CEO Overpaid Relative To Its Peers?

Simply Wall St

In 1981 George Fink was appointed CEO of Bonterra Energy Corp. (TSE:BNE). 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Bonterra Energy

How Does George Fink's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Bonterra Energy Corp. has a market cap of CA$115m, and reported total annual CEO compensation of CA$401k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$280k. We looked at a group of companies with market capitalizations under CA$262m, and the median CEO total compensation was CA$179k.

It would therefore appear that Bonterra Energy Corp. pays George Fink 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 better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Bonterra Energy, below.

TSX:BNE CEO Compensation, October 25th 2019

Is Bonterra Energy Corp. Growing?

On average over the last three years, Bonterra Energy Corp. has grown earnings per share (EPS) by 119% each year (using a line of best fit). It saw its revenue drop 10% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.

Has Bonterra Energy Corp. Been A Good Investment?

Given the total loss of 84% over three years, many shareholders in Bonterra Energy Corp. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount Bonterra Energy Corp. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. 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 Bonterra Energy.

Important note: Bonterra Energy may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.