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Does ARC Resources Ltd.'s (TSE:ARX) CEO Pay Reflect Performance?

Simply Wall St

In 2013 Myron Stadnyk was appointed CEO of ARC Resources Ltd. (TSE:ARX). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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.

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See our latest analysis for ARC Resources

How Does Myron Stadnyk's Compensation Compare With Similar Sized Companies?

According to our data, ARC Resources Ltd. has a market capitalization of CA$2.9b, and pays its CEO total annual compensation worth CA$4.7m. (This is based on the year to December 2018). That's a fairly small increase of 3.7% on year before. While we always look at total compensation first, we note that the salary component is less, at CA$570k. We looked at a group of companies with market capitalizations from CA$1.3b to CA$4.3b, and the median CEO total compensation was CA$3.2m.

Thus we can conclude that Myron Stadnyk receives more in total compensation than the median of a group of companies in the same market, and of similar size to ARC Resources Ltd.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at ARC Resources has changed over time.

TSX:ARX CEO Compensation, May 17th 2019

Is ARC Resources Ltd. Growing?

Over the last three years ARC Resources Ltd. has grown its earnings per share (EPS) by an average of 45% per year (using a line of best fit). In the last year, its revenue is up 11%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.

Has ARC Resources Ltd. Been A Good Investment?

With a three year total loss of 55%, ARC Resources Ltd. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount ARC Resources Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling ARC Resources shares (free trial).

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

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.