How Should Investors Feel About Senex Energy Limited’s (ASX:SXY) CEO Pay?
In 2010 Ian Davies was appointed CEO of Senex Energy Limited (ASX:SXY). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Senex Energy
How Does Ian Davies’s Compensation Compare With Similar Sized Companies?
Our data indicates that Senex Energy Limited is worth AU$567m, and total annual CEO compensation is AU$2m. That’s a notable increase of 20% on last year. We looked at a group of companies with market capitalizations from AU$283m to AU$1.1b, and the median CEO compensation was AU$1m.
Thus we can conclude that Ian Davies receives more in total compensation than the median of a group of companies in the same market, and of similar size to Senex Energy Limited. However, this doesn’t necessarily mean the pay is too high. 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 Senex Energy has changed over time.
Is Senex Energy Limited Growing?
Over the last three years Senex Energy Limited has shrunk its earnings per share by an average of 9.4% per year. It achieved revenue growth of 61% over the last year.
As investors, we do are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Senex Energy Limited Been A Good Investment?
Most shareholders would probably be pleased with Senex Energy Limited for providing a total return of 105% over three years. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
In Summary…
We compared the total CEO remuneration paid by Senex Energy Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Senex Energy Limited shares with their own money (free access).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
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.
