Is Encana Corporation’s (TSE:ECA) CEO Paid Enough Relative To Peers?
In 2013 Doug Suttles was appointed CEO of Encana Corporation (TSE:ECA). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Encana
How Does Doug Suttles’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Encana Corporation has a market cap of CA$12.6b, and is paying total annual CEO compensation of US$12m. That’s actually a decrease on the year before. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12.0b. The median total CEO compensation was US$4m.
As you can see, Doug Suttles is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Encana Corporation 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, below, how CEO compensation at Encana has changed over time.
Is Encana Corporation Growing?
On average over the last three years, Encana Corporation has grown earnings per share (EPS) by 96% each year. Its revenue is up 24% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Encana Corporation Been A Good Investment?
Most shareholders would probably be pleased with Encana Corporation for providing a total return of 36% over three years. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
We compared the total CEO remuneration paid by Encana Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Encana Corporation.
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
