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Does Peninsula Energy's (ASX:PEN) CEO Salary Compare Well With The Performance Of The Company?

Simply Wall St
·3 min read

This article will reflect on the compensation paid to Wayne Heili who has served as CEO of Peninsula Energy Limited (ASX:PEN) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Peninsula Energy

How Does Total Compensation For Wayne Heili Compare With Other Companies In The Industry?

According to our data, Peninsula Energy Limited has a market capitalization of AU$62m, and paid its CEO total annual compensation worth US$815k over the year to June 2020. We note that's an increase of 53% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$324k.

On comparing similar-sized companies in the industry with market capitalizations below AU$276m, we found that the median total CEO compensation was US$259k. Hence, we can conclude that Wayne Heili is remunerated higher than the industry median. Furthermore, Wayne Heili directly owns AU$239k worth of shares in the company.

Component

2020

2019

Proportion (2020)

Salary

US$324k

US$326k

40%

Other

US$491k

US$205k

60%

Total Compensation

US$815k

US$532k

100%

On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. Peninsula Energy sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at Peninsula Energy Limited's Growth Numbers

Peninsula Energy Limited has seen its earnings per share (EPS) increase by 25% a year over the past three years. In the last year, its revenue is down 7.7%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Peninsula Energy Limited Been A Good Investment?

With a three year total loss of 77% for the shareholders, Peninsula Energy Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Peninsula Energy pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Peninsula Energy (of which 2 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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