Rob Broen became the CEO of Athabasca Oil Corporation (TSE:ATH) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Rob Broen's Compensation Compare With Similar Sized Companies?
Our data indicates that Athabasca Oil Corporation is worth CA$455m, and total annual CEO compensation is CA$2.8m. (This is based on the year to December 2018). That's less than last year. While we always look at total compensation first, we note that the salary component is less, at CA$515k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$269m to CA$1.1b. The median total CEO compensation was CA$1.4m.
Thus we can conclude that Rob Broen receives more in total compensation than the median of a group of companies in the same market, and of similar size to Athabasca Oil Corporation. 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 a visual representation of the CEO compensation at Athabasca Oil, below.
Is Athabasca Oil Corporation Growing?
On average over the last three years, Athabasca Oil Corporation has grown earnings per share (EPS) by 44% each year (using a line of best fit). It saw its revenue drop -2.1% over the last year.
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. You might want to check this free visual report on analyst forecasts for future earnings.
Has Athabasca Oil Corporation Been A Good Investment?
Given the total loss of 39% over three years, many shareholders in Athabasca Oil Corporation are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Athabasca Oil Corporation with the amount paid at companies with a similar market capitalization. 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. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying Athabasca Oil shares with their own money (free access).
If you want to buy a stock that is better than Athabasca Oil, this free list of high return, low debt companies is a great place to look.
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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.