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Is TAG Oil Ltd.'s (TSE:TAO) CEO Overpaid Relative To Its Peers?

Simply Wall St

In 2015 Toby Pierce was appointed CEO of TAG Oil Ltd. (TSE:TAO). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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 TAG Oil

How Does Toby Pierce's Compensation Compare With Similar Sized Companies?

According to our data, TAG Oil Ltd. has a market capitalization of CA$32m, and paid its CEO total annual compensation worth CA$284k over the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$240k. We looked at a group of companies with market capitalizations under CA$263m, and the median CEO total compensation was CA$224k.

So Toby Pierce is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at TAG Oil, below.

TSX:TAO CEO Compensation, December 24th 2019

Is TAG Oil Ltd. Growing?

On average over the last three years, TAG Oil Ltd. has grown earnings per share (EPS) by 1.7% each year (using a line of best fit). It achieved revenue growth of 11% over the last year.

I would argue that the modest growth in revenue is a notable positive. And the improvement in earnings per share is modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has TAG Oil Ltd. Been A Good Investment?

With a three year total loss of 54%, TAG Oil Ltd. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Toby Pierce is paid around the same as most CEOs of similar size companies.

The company cannot boast particularly strong per share growth. And shareholder returns have been disappointing over the last three years. So suffice it to say we don't think the compensation is modest. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at TAG Oil.

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.

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