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Should You Worry About TransAtlantic Petroleum Ltd.'s (NYSEMKT:TAT) CEO Pay?

Simply Wall St

In 2011 N. Mitchell was appointed CEO of TransAtlantic Petroleum Ltd. (NYSEMKT:TAT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for TransAtlantic Petroleum

How Does N. Mitchell's Compensation Compare With Similar Sized Companies?

According to our data, TransAtlantic Petroleum Ltd. has a market capitalization of US$43m, and pays its CEO total annual compensation worth US$222k. (This is based on the year to December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$162k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$434k.

Most shareholders would consider it a positive that N. Mitchell takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at TransAtlantic Petroleum has changed from year to year.

AMEX:TAT CEO Compensation, April 23rd 2019

Is TransAtlantic Petroleum Ltd. Growing?

TransAtlantic Petroleum Ltd. has increased its earnings per share (EPS) by an average of 47% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 25%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has TransAtlantic Petroleum Ltd. Been A Good Investment?

TransAtlantic Petroleum Ltd. has generated a total shareholder return of 14% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

It appears that TransAtlantic Petroleum Ltd. remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest N. Mitchell is overcompensated.

Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling TransAtlantic Petroleum (free visualization of insider trades).

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

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.

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. Thank you for reading.