U.S. Markets closed

How Should Investors React To Canacol Energy Ltd's (TSE:CNE) CEO Pay?

Simply Wall St

Charle Gamba became the CEO of Canacol Energy Ltd (TSE:CNE) in 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Canacol Energy

How Does Charle Gamba's Compensation Compare With Similar Sized Companies?

Our data indicates that Canacol Energy Ltd is worth CA$832m, and total annual CEO compensation is US$1.8m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$611k. We looked at a group of companies with market capitalizations from CA$533m to CA$2.1b, and the median CEO total compensation was CA$2.2m.

So Charle Gamba is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Canacol Energy, below.

TSX:CNE CEO Compensation, August 15th 2019

Is Canacol Energy Ltd Growing?

Canacol Energy Ltd has reduced its earnings per share by an average of 7.3% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 13% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Canacol Energy Ltd Been A Good Investment?

Canacol Energy Ltd has generated a total shareholder return of 10% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Remuneration for Charle Gamba is close enough to the median pay for a CEO of a similar sized company .

We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We wouldn't say the CEO pay is too high, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Canacol Energy (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.