Is North American Construction Group Ltd (NYSE:NOA) Overpaying Its CEO?
Martin Ferron has been the CEO of North American Construction Group Ltd (NYSE:NOA) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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.
See our latest analysis for North American Construction Group
How Does Martin Ferron’s Compensation Compare With Similar Sized Companies?
Our data indicates that North American Construction Group Ltd is worth US$229m, and total annual CEO compensation is CA$2.2m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$625k. When we examined a selection of companies with market caps ranging from CA$132m to CA$527m, we found the median CEO compensation was CA$1.3m.
As you can see, Martin Ferron is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean North American Construction Group Ltd is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at North American Construction Group has changed from year to year.
Is North American Construction Group Ltd Growing?
Over the last three years North American Construction Group Ltd has grown its earnings per share (EPS) by an average of 131% per year. Its revenue is up 32% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has North American Construction Group Ltd Been A Good Investment?
Most shareholders would probably be pleased with North American Construction Group Ltd for providing a total return of 401% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
We compared total CEO remuneration at North American Construction Group Ltd with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling North American Construction Group shares (free trial).
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.
