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A Quick Analysis On Jupiter Energy's (ASX:JPR) CEO Compensation

Simply Wall St
·3 min read

Geoff Gander is the CEO of Jupiter Energy Limited (ASX:JPR), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Jupiter Energy pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Jupiter Energy

Comparing Jupiter Energy Limited's CEO Compensation With the industry

Our data indicates that Jupiter Energy Limited has a market capitalization of AU$7.4m, and total annual CEO compensation was reported as AU$329k for the year to June 2020. That's a notable decrease of 16% on last year. We note that the salary portion, which stands at AU$289.1k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under AU$257m, the reported median total CEO compensation was AU$351k. This suggests that Jupiter Energy remunerates its CEO largely in line with the industry average.

Component

2020

2019

Proportion (2020)

Salary

AU$289k

AU$313k

88%

Other

AU$40k

AU$77k

12%

Total Compensation

AU$329k

AU$390k

100%

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. Jupiter Energy is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ceo-compensation

Jupiter Energy Limited's Growth

Over the last three years, Jupiter Energy Limited has shrunk its earnings per share by 70% per year. It saw its revenue drop 37% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Jupiter Energy Limited Been A Good Investment?

Since shareholders would have lost about 49% over three years, some Jupiter Energy Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Geoff is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Jupiter Energy (of which 3 are potentially serious!) that you should know about in order to have a holistic understanding of the 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 editorial-team (at) simplywallst.com.