Wayne Heili has been the CEO of Peninsula Energy Limited (ASX:PEN) since 2017. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Wayne Heili's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Peninsula Energy Limited has a market cap of AU$51m, and reported total annual CEO compensation of US$532k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$326k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$255k.
As you can see, Wayne Heili is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Peninsula Energy Limited is paying too much. 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, below, how CEO compensation at Peninsula Energy has changed over time.
Is Peninsula Energy Limited Growing?
On average over the last three years, Peninsula Energy Limited has grown earnings per share (EPS) by 34% each year (using a line of best fit). Its revenue is down 50% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Peninsula Energy Limited Been A Good Investment?
Since shareholders would have lost about 77% over three years, some Peninsula Energy Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Peninsula Energy Limited with the amount paid at companies with a similar market capitalization. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Peninsula Energy (free visualization of insider trades).
Important note: Peninsula 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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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