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Does Victoria Oil & Gas Plc’s (LON:VOG) CEO Pay Matter?

In 2016 Ahmet Dik was appointed CEO of Victoria Oil & Gas Plc (LON:VOG). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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 Victoria Oil & Gas

How Does Ahmet Dik’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Victoria Oil & Gas Plc has a market cap of UK£22m, and is paying total annual CEO compensation of US$774k. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$600k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$323k.

As you can see, Ahmet Dik is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Victoria Oil & Gas Plc is paying too much. 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 Victoria Oil & Gas, below.

AIM:VOG CEO Compensation, February 28th 2019
AIM:VOG CEO Compensation, February 28th 2019

Is Victoria Oil & Gas Plc Growing?

On average over the last three years, Victoria Oil & Gas Plc has grown earnings per share (EPS) by 18% each year (using a line of best fit). In the last year, its revenue is down -47%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Victoria Oil & Gas Plc Been A Good Investment?

With a three year total loss of 66%, Victoria Oil & Gas Plc 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 Victoria Oil & Gas Plc 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. Having said that, shareholders may be disappointed with the weak returns over the last three years. 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. Shareholders may want to check for free if Victoria Oil & Gas insiders are buying or selling shares.

Important note: Victoria Oil & Gas 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.

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.

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