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Does White Energy Company Limited's (ASX:WEC) CEO Pay Matter?

Simply Wall St

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Brian Flannery has been the CEO of White Energy Company Limited (ASX:WEC) since 2010. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for White Energy

How Does Brian Flannery's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that White Energy Company Limited has a market cap of AU$48m, and is paying total annual CEO compensation of AU$146k. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$120k. We examined a group of similar sized companies, with market capitalizations of below AU$288m. The median CEO total compensation in that group is AU$359k.

Most shareholders would consider it a positive that Brian Flannery takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at White Energy has changed from year to year.

ASX:WEC CEO Compensation, June 12th 2019

Is White Energy Company Limited Growing?

On average over the last three years, White Energy Company Limited has grown earnings per share (EPS) by 31% each year (using a line of best fit). In the last year, its revenue is down -39%.

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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has White Energy Company Limited Been A Good Investment?

With a total shareholder return of 2.1% over three years, White Energy Company Limited has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

White Energy Company Limited is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn't mean that Brian Flannery is paid too much.

It's good to see reasonable payment of the CEO, even while the business improves. But it would be nice if insiders were also buying shares. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at White Energy.

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

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.