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How Should Investors React To Genesis Energy Limited's (NZSE:GNE) CEO Pay?

Simply Wall St

In 2016 Marc England was appointed CEO of Genesis Energy Limited (NZSE:GNE). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Genesis Energy

How Does Marc England's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Genesis Energy Limited has a market cap of NZ$3.3b, and reported total annual CEO compensation of NZ$2.4m for the year to June 2019. That's a notable increase of 14% on last year. We think total compensation is more important but we note that the CEO salary is lower, at NZ$1.2m. We looked at a group of companies with market capitalizations from NZ$1.6b to NZ$5.0b, and the median CEO total compensation was NZ$2.1m.

So Marc England receives a similar amount to the median CEO pay, amongst 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, below, how CEO compensation at Genesis Energy has changed over time.

NZSE:GNE CEO Compensation, November 1st 2019

Is Genesis Energy Limited Growing?

Genesis Energy Limited has reduced its earnings per share by an average of 57% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 17% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Genesis Energy Limited Been A Good Investment?

Most shareholders would probably be pleased with Genesis Energy Limited for providing a total return of 113% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

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

We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. Shareholders may want to check for free if Genesis Energy insiders are buying or selling shares.

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.