In 2013 Corey Ruttan was appointed CEO of Alvopetro Energy Ltd. (CVE:ALV). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Corey Ruttan's Compensation Compare With Similar Sized Companies?
Our data indicates that Alvopetro Energy Ltd. is worth CA$57m, and total annual CEO compensation is US$272k. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$250k. We took a group of companies with market capitalizations below CA$269m, and calculated the median CEO total compensation to be CA$150k.
As you can see, Corey Ruttan is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Alvopetro Energy Ltd. 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 Alvopetro Energy has changed over time.
Is Alvopetro Energy Ltd. Growing?
Alvopetro Energy Ltd. has increased its earnings per share (EPS) by an average of 50% a year, over the last three years (using a line of best fit). Its revenue is up 26% over last year.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Alvopetro Energy Ltd. Been A Good Investment?
I think that the total shareholder return of 100%, over three years, would leave most Alvopetro Energy Ltd. shareholders smiling. 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.
We compared the total CEO remuneration paid by Alvopetro Energy Ltd., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Alvopetro Energy insiders are buying or selling shares.
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.
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 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. Thank you for reading.