Ian Dundas has been the CEO of Enerplus Corporation (TSE:ERF) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ian Dundas’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Enerplus Corporation has a market cap of CA$2.1b, and reported total annual CEO compensation of CA$4.0m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CA$527k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from CA$1.3b to CA$4.2b, we found the median CEO total compensation was CA$2.9m.
As you can see, Ian Dundas is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Enerplus Corporation 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 a visual representation of the CEO compensation at Enerplus, below.
Is Enerplus Corporation Growing?
Enerplus Corporation has increased its earnings per share (EPS) by an average of 21% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 1.7%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Enerplus Corporation Been A Good Investment?
Given the total loss of 22% over three years, many shareholders in Enerplus Corporation are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Enerplus Corporation pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. 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. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Enerplus.
If you want to buy a stock that is better than Enerplus, this free list of high return, low debt companies is a great place to look.
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