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Is Kelt Exploration Ltd.'s (TSE:KEL) CEO Pay Fair?

Simply Wall St

David Wilson became the CEO of Kelt Exploration Ltd. (TSE:KEL) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Kelt Exploration

How Does David Wilson's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Kelt Exploration Ltd. has a market cap of CA$634m, and reported total annual CEO compensation of CA$604k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from CA$265m to CA$1.1b, and the median CEO total compensation was CA$1.4m.

Most shareholders would consider it a positive that David Wilson takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at Kelt Exploration has changed over time.

TSX:KEL CEO Compensation, November 14th 2019

Is Kelt Exploration Ltd. Growing?

Kelt Exploration Ltd. has increased its earnings per share (EPS) by an average of 127% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 11%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Kelt Exploration Ltd. Been A Good Investment?

Since shareholders would have lost about 43% over three years, some Kelt Exploration Ltd. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It appears that Kelt Exploration Ltd. remunerates its CEO below most similar sized companies.

Many would consider this to indicate that the pay is modest since the business is growing. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We're not critical of the remuneration David Wilson receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. So you may want to check if insiders are buying Kelt Exploration shares with their own money (free access).

Important note: Kelt Exploration may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.