Pancontinental Resources Corporation (CVE:PUC) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 21 June 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
How Does Total Compensation For Thomas Croft Compare With Other Companies In The Industry?
Our data indicates that Pancontinental Resources Corporation has a market capitalization of CA$39m, and total annual CEO compensation was reported as CA$161k for the year to December 2020. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$161k.
In comparison with other companies in the industry with market capitalizations under CA$243m, the reported median total CEO compensation was CA$150k. This suggests that Pancontinental Resources remunerates its CEO largely in line with the industry average. Moreover, Thomas Croft also holds CA$585k worth of Pancontinental Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8% of the pie. Speaking on a company level, Pancontinental Resources prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Pancontinental Resources Corporation's Growth
Pancontinental Resources Corporation has reduced its earnings per share by 1.4% a year over the last three years. Its revenue is down 37% over the previous year.
The lack of EPS growth is certainly uninspiring. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Pancontinental Resources Corporation Been A Good Investment?
Boasting a total shareholder return of 129% over three years, Pancontinental Resources Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Pancontinental Resources rewards its CEO solely through a salary, ignoring non-salary benefits completely. Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
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 Pancontinental Resources (2 are a bit concerning!) that you should be aware of before investing here.
Switching gears from Pancontinental Resources, 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.
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.
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