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Should You Worry About Alvopetro Energy Ltd.'s (CVE:ALV) CEO Pay Cheque?

Simply Wall St

Corey Ruttan has been the CEO of Alvopetro Energy Ltd. (CVE:ALV) since 2013. 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 method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Alvopetro Energy

How Does Corey Ruttan's Compensation Compare With Similar Sized Companies?

According to our data, Alvopetro Energy Ltd. has a market capitalization of CA$71m, and paid its CEO total annual compensation worth US$377k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$250k. We took a group of companies with market capitalizations below CA$264m, and calculated the median CEO total compensation to be CA$180k.

Thus we can conclude that Corey Ruttan receives more in total compensation than the median of a group of companies in the same market, and of similar size to Alvopetro Energy Ltd.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Alvopetro Energy has changed over time.

TSXV:ALV CEO Compensation, December 9th 2019

Is Alvopetro Energy Ltd. Growing?

On average over the last three years, Alvopetro Energy Ltd. has grown earnings per share (EPS) by 51% each year (using a line of best fit). In the last year, its revenue is down 30%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.

Has Alvopetro Energy Ltd. Been A Good Investment?

I think that the total shareholder return of 240%, over three years, would leave most Alvopetro Energy Ltd. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at Alvopetro Energy Ltd. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Alvopetro Energy.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.