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Here's What We Think About Genesis Energy's (NZSE:GNE) CEO Pay

Simply Wall St
·4 mins read

Marc England became the CEO of Genesis Energy Limited (NZSE:GNE) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Genesis Energy pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Genesis Energy

Comparing Genesis Energy Limited's CEO Compensation With the industry

At the time of writing, our data shows that Genesis Energy Limited has a market capitalization of NZ$3.0b, and reported total annual CEO compensation of NZ$2.1m for the year to June 2020. That's a notable decrease of 12% on last year. We note that the salary portion, which stands at NZ$1.23m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from NZ$1.5b to NZ$4.9b, the reported median CEO total compensation was NZ$1.5m. This suggests that Marc England is paid more than the median for the industry. Moreover, Marc England also holds NZ$1.4m worth of Genesis Energy stock directly under their own name.

Component

2020

2019

Proportion (2020)

Salary

NZ$1.2m

NZ$1.2m

59%

Other

NZ$845k

NZ$1.2m

41%

Total Compensation

NZ$2.1m

NZ$2.4m

100%

On an industry level, around 35% of total compensation represents salary and 65% is other remuneration. According to our research, Genesis Energy has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

Genesis Energy Limited's Growth

Over the last three years, Genesis Energy Limited has shrunk its earnings per share by 28% per year. It saw its revenue drop 4.0% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Genesis Energy Limited Been A Good Investment?

Most shareholders would probably be pleased with Genesis Energy Limited for providing a total return of 51% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we noted earlier, Genesis Energy pays its CEO higher than the norm for similar-sized companies belonging to the same industry. We're not seeing great strides in EPS, but the company has clearly pleased some investors, given the returns over the last three years. Considering positive investor returns, it would be bold of us to criticize CEO compensation, but shareholders might want to see healthier EPS growth before a raise is given out.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Genesis Energy that investors should be aware of in a dynamic business environment.

Switching gears from Genesis Energy, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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