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Does Azimut Exploration Inc.'s (CVE:AZM) CEO Pay Compare Well With Peers?

Simply Wall St

Jean-Marc Lulin has been the CEO of Azimut Exploration Inc. (CVE:AZM) since 2003. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Azimut Exploration

How Does Jean-Marc Lulin's Compensation Compare With Similar Sized Companies?

According to our data, Azimut Exploration Inc. has a market capitalization of CA$106m, and paid its CEO total annual compensation worth CA$187k over the year to August 2019. It is worth noting that the CEO compensation consists almost entirely of the salary, worth CA$187k. We examined a group of similar sized companies, with market capitalizations of below CA$282m. The median CEO total compensation in that group is CA$221k.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 91% of total compensation represents salary and 9.0% is other remuneration. At the company level, Azimut Exploration pays Jean-Marc Lulin solely through a salary, preferring to go down a conventional route.

That means Jean-Marc Lulin receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see a visual representation of the CEO compensation at Azimut Exploration, below.

TSXV:AZM CEO Compensation May 2nd 2020

Is Azimut Exploration Inc. Growing?

On average over the last three years, Azimut Exploration Inc. has seen earnings per share (EPS) move in a favourable direction by 30% each year (using a line of best fit). In the last year, its revenue is up 188%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Azimut Exploration Inc. Been A Good Investment?

Boasting a total shareholder return of 376% over three years, Azimut Exploration Inc. has done well by shareholders. 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.

In Summary...

Jean-Marc Lulin is paid around what is normal for the leaders of comparable size companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is an important area to keep your eyes on, but we've also identified 6 warning signs for Azimut Exploration (2 can't be ignored!) that you should be aware of before investing here.

Important note: Azimut Exploration 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 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.

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. Thank you for reading.