Shaun Ankers has been the CEO of Energy One Limited (ASX:EOL) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Energy One pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Energy One Limited's CEO Compensation With the industry
At the time of writing, our data shows that Energy One Limited has a market capitalization of AU$105m, and reported total annual CEO compensation of AU$831k for the year to June 2020. That's a notable increase of 29% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$372k.
For comparison, other companies in the industry with market capitalizations below AU$278m, reported a median total CEO compensation of AU$330k. This suggests that Shaun Ankers is paid more than the median for the industry. Moreover, Shaun Ankers also holds AU$3.4m worth of Energy One stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. Energy One sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Energy One Limited's Growth Numbers
Energy One Limited has seen its earnings per share (EPS) increase by 66% a year over the past three years. In the last year, its revenue is up 29%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Energy One Limited Been A Good Investment?
Boasting a total shareholder return of 599% over three years, Energy One Limited 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.
As we touched on above, Energy One Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth and shareholder returns have been top-notch for the past three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Shaun's performance creates value for the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Energy One that investors should think about before committing capital to this stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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 firstname.lastname@example.org.