The underwhelming share price performance of PHX Minerals Inc. (NYSE:PHX) in the past three years would have disappointed many shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 02 March 2022, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.
Comparing PHX Minerals Inc.'s CEO Compensation With the industry
According to our data, PHX Minerals Inc. has a market capitalization of US$80m, and paid its CEO total annual compensation worth US$1.3m over the year to September 2021. That's a notable increase of 11% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$345k.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$299k. Accordingly, our analysis reveals that PHX Minerals Inc. pays Chad Stephens north of the industry median. Moreover, Chad Stephens also holds US$1.1m worth of PHX Minerals 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 21% of total compensation represents salary and 79% is other remuneration. According to our research, PHX Minerals has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
PHX Minerals Inc.'s Growth
PHX Minerals Inc. has reduced its earnings per share by 66% a year over the last three years. It achieved revenue growth of 102% over the last year.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has PHX Minerals Inc. Been A Good Investment?
Few PHX Minerals Inc. shareholders would feel satisfied with the return of -85% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 5 warning signs for PHX Minerals (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.