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How Should Investors Feel About Pancontinental Resources' (CVE:PUC) CEO Remuneration?

Simply Wall St

Thomas Croft became the CEO of Pancontinental Resources Corporation (CVE:PUC) in 2017, 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 Pancontinental Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Pancontinental Resources

Comparing Pancontinental Resources Corporation's CEO Compensation With the industry

According to our data, Pancontinental Resources Corporation has a market capitalization of CA$25m, and paid its CEO total annual compensation worth CA$158k over the year to December 2019. That's a notable increase of 13% on last year. Notably, the salary of CA$158k is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under CA$264m, the reported median total CEO compensation was CA$156k. This suggests that Pancontinental Resources remunerates its CEO largely in line with the industry average. Furthermore, Thomas Croft directly owns CA$340k worth of shares in the company.

Component

2019

2018

Proportion (2019)

Salary

CA$158k

CA$128k

100%

Other

-

CA$12k

-

Total Compensation

CA$158k

CA$140k

100%

Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. Speaking on a company level, Pancontinental Resources prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

Pancontinental Resources Corporation's Growth

Over the past three years, Pancontinental Resources Corporation has seen its earnings per share (EPS) grow by 14% per year. It saw its revenue drop 27% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, 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 Pancontinental Resources Corporation Been A Good Investment?

Boasting a total shareholder return of 110% over three years, Pancontinental Resources Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Pancontinental Resources rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, Pancontinental Resources Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for Pancontinental Resources you should be aware of, and 2 of them don't sit too well with us.

Important note: Pancontinental Resources is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.