Is US Energy Corp’s (NASDAQ:USEG) CEO Pay Fair?
David Veltri became the CEO of US Energy Corp (NASDAQ:USEG) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for U.S. Energy
How Does David Veltri’s Compensation Compare With Similar Sized Companies?
According to our data, US Energy Corp has a market capitalization of US$12m, and pays its CEO total annual compensation worth US$394k. That’s a notable increase of 8.8% on last year. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$293k.
Thus we can conclude that David Veltri receives more in total compensation than the median of a group of companies in the same market, and of similar size to US Energy Corp. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at U.S. Energy has changed from year to year.
Is US Energy Corp Growing?
US Energy Corp has increased its earnings per share (EPS) by an average of 112% a year, over the last three years The trailing twelve months of revenue was pretty much the same as the prior period.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.
Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has US Energy Corp Been A Good Investment?
Given the total loss of 49% over three years, many shareholders in US Energy Corp are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
We compared the total CEO remuneration paid by US Energy Corp, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. This doesn’t look great when you consider CEO remuneration is up on last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
