Greg Guidry became the CEO of Gran Tierra Energy Inc. (NYSEMKT:GTE) in 2015. 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. 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.
How Does Greg Guidry's Compensation Compare With Similar Sized Companies?
According to our data, Gran Tierra Energy Inc. has a market capitalization of US$601m, and pays its CEO total annual compensation worth US$1.6m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$293k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.
Most shareholders would consider it a positive that Greg Guidry takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Gran Tierra Energy has changed from year to year.
Is Gran Tierra Energy Inc. Growing?
Gran Tierra Energy Inc. has increased its earnings per share (EPS) by an average of 96% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 35%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Gran Tierra Energy Inc. Been A Good Investment?
With a three year total loss of 42%, Gran Tierra Energy Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
It looks like Gran Tierra Energy Inc. pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We're not critical of the remuneration Greg Guidry receives, but it would be good to see improved returns to shareholders before the remuneration grows too much.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Gran Tierra Energy.
Important note: Gran Tierra Energy 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.
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