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Is NuEnergy Gas Limited's (ASX:NGY) CEO Salary Justified?

Simply Wall St

Ian Wang has been the CEO of NuEnergy Gas Limited (ASX:NGY) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.

View our latest analysis for NuEnergy Gas

How Does Ian Wang's Compensation Compare With Similar Sized Companies?

Our data indicates that NuEnergy Gas Limited is worth AU$12m, and total annual CEO compensation was reported as AU$283k for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$263k. We examined a group of similar sized companies, with market capitalizations of below AU$290m. The median CEO total compensation in that group is AU$380k.

So Ian Wang receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at NuEnergy Gas has changed over time.

ASX:NGY CEO Compensation, December 23rd 2019

Is NuEnergy Gas Limited Growing?

Over the last three years NuEnergy Gas Limited has shrunk its earnings per share by an average of 32% per year (measured with a line of best fit). In the last year, its revenue is up 884%.

The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has NuEnergy Gas Limited Been A Good Investment?

With a three year total loss of 80%, NuEnergy Gas Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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

We would like to see somewhat stronger per share growth. And shareholder returns have been disappointing over the last three years. So it would take a bold person to suggest the pay is too modest. Shareholders may want to check for free if NuEnergy Gas insiders are buying or selling shares.

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.

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.

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. Thank you for reading.