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Craig Hansen has been the CEO of Zargon Oil & Gas Ltd. (TSE:ZAR) since 1993. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Craig Hansen's Compensation Compare With Similar Sized Companies?
According to our data, Zargon Oil & Gas Ltd. has a market capitalization of CA$8.4m, and pays its CEO total annual compensation worth CA$282k. (This is based on the year to December 2018). That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at CA$245k. We looked at a group of companies with market capitalizations under CA$267m, and the median CEO total compensation was CA$151k.
As you can see, Craig Hansen is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Zargon Oil & Gas Ltd. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Zargon Oil & Gas has changed over time.
Is Zargon Oil & Gas Ltd. Growing?
On average over the last three years, Zargon Oil & Gas Ltd. has grown earnings per share (EPS) by 84% each year (using a line of best fit). In the last year, its revenue is down -14%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Zargon Oil & Gas Ltd. Been A Good Investment?
With a three year total loss of 96%, Zargon Oil & Gas Ltd. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Zargon Oil & Gas Ltd. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. 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. Whatever your view on compensation, you might want to check if insiders are buying or selling Zargon Oil & Gas shares (free trial).
Important note: Zargon Oil & Gas may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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 firstname.lastname@example.org. 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.