Is Global Energy Ventures Ltd.'s (ASX:GEV) CEO Salary Justified?
The CEO of Global Energy Ventures Ltd. (ASX:GEV) is Fletcher Brand. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Global Energy Ventures
How Does Fletcher Brand's Compensation Compare With Similar Sized Companies?
According to our data, Global Energy Ventures Ltd. has a market capitalization of AU$61m, and paid its CEO total annual compensation worth AU$353k over the year to June 2019. We note that's an increase of 152% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$186k. We took a group of companies with market capitalizations below AU$294m, and calculated the median CEO total compensation to be AU$371k.
That means Fletcher Brand receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Global Energy Ventures, below.
Is Global Energy Ventures Ltd. Growing?
Global Energy Ventures Ltd. has increased its earnings per share (EPS) by an average of 59% a year, over the last three years (using a line of best fit). It has seen most of its revenue evaporate over the past year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Global Energy Ventures Ltd. Been A Good Investment?
I think that the total shareholder return of 433%, over three years, would leave most Global Energy Ventures Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Fletcher Brand is paid around what is normal the leaders of comparable size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying Global Energy Ventures shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.
