Shareholders May Not Be So Generous With Bounty Oil & Gas NL's (ASX:BUY) CEO Compensation And Here's Why
Key Insights
Bounty Oil & Gas' Annual General Meeting to take place on 29th of November
CEO Philip Kelso's total compensation includes salary of AU$320.0k
The overall pay is comparable to the industry average
Over the past three years, Bounty Oil & Gas' EPS grew by 10% and over the past three years, the total loss to shareholders 36%
In the past three years, the share price of Bounty Oil & Gas NL (ASX:BUY) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 29th of November. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
View our latest analysis for Bounty Oil & Gas
Comparing Bounty Oil & Gas NL's CEO Compensation With The Industry
At the time of writing, our data shows that Bounty Oil & Gas NL has a market capitalization of AU$9.6m, and reported total annual CEO compensation of AU$320k for the year to June 2023. We note that's a small decrease of 3.0% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth AU$320k.
For comparison, other companies in the Australian Oil and Gas industry with market capitalizations below AU$305m, reported a median total CEO compensation of AU$433k. From this we gather that Philip Kelso is paid around the median for CEOs in the industry. Moreover, Philip Kelso also holds AU$267k worth of Bounty Oil & Gas stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$320k | AU$320k | 100% |
Other | - | AU$9.9k | - |
Total Compensation | AU$320k | AU$330k | 100% |
On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. At the company level, Bounty Oil & Gas pays Philip Kelso solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Bounty Oil & Gas NL's Growth
Over the past three years, Bounty Oil & Gas NL has seen its earnings per share (EPS) grow by 10% per year. In the last year, its revenue is down 8.0%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Bounty Oil & Gas NL Been A Good Investment?
Few Bounty Oil & Gas NL shareholders would feel satisfied with the return of -36% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Bounty Oil & Gas pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Bounty Oil & Gas (3 don't sit too well with us!) that you should be aware of before investing here.
Switching gears from Bounty Oil & Gas, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
