Andrew Phillips has been the CEO of PrairieSky Royalty Ltd. (TSE:PSK) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Andrew Phillips's Compensation Compare With Similar Sized Companies?
Our data indicates that PrairieSky Royalty Ltd. is worth CA$4.3b, and total annual CEO compensation is CA$4.3m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$550k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$2.7b to CA$8.5b. The median total CEO compensation was CA$3.8m.
So Andrew Phillips is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at PrairieSky Royalty has changed over time.
Is PrairieSky Royalty Ltd. Growing?
On average over the last three years, PrairieSky Royalty Ltd. has grown earnings per share (EPS) by 39% each year (using a line of best fit). It saw its revenue drop -4.7% over the last year.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has PrairieSky Royalty Ltd. Been A Good Investment?
Since shareholders would have lost about 23% over three years, some PrairieSky Royalty Ltd. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Remuneration for Andrew Phillips is close enough to the median pay for a CEO of a similar sized company .
We like that the company is growing EPS, but we find the returns over the last three years to be lacking. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling PrairieSky Royalty (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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