Does Calima Energy Limited’s (ASX:CE1) CEO Pay Reflect Performance?

Alan Stein became the CEO of Calima Energy Limited (ASX:CE1) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.

Check out our latest analysis for Calima Energy

How Does Alan Stein’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Calima Energy Limited has a market cap of AU$11m, and reported total annual CEO compensation of AU$165k for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$149k. We looked at a group of companies with market capitalizations under AU$297m, and the median CEO total compensation was AU$384k.

A first glance this seems like a real positive for shareholders, since Alan Stein is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Calima Energy, below.

ASX:CE1 CEO Compensation, January 31st 2020
ASX:CE1 CEO Compensation, January 31st 2020

Is Calima Energy Limited Growing?

On average over the last three years, Calima Energy Limited has shrunk earnings per share by 75% each year (measured with a line of best fit). In the last year, its revenue is up 967%.

Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. 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 Calima Energy Limited Been A Good Investment?

With a three year total loss of 85%, Calima Energy Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

It appears that Calima Energy Limited remunerates its CEO below most similar sized companies.

It’s well worth noting that while Alan Stein is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. So you may want to check if insiders are buying Calima Energy shares with their own money (free access).

Important note: Calima Energy 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.

If you spot an error that warrants correction, please contact the editor at 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.

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