Is Buru Energy Limited’s (ASX:BRU) CEO Paid At A Competitive Rate?

Eric Streitberg is the CEO of Buru Energy Limited (ASX:BRU). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.

See our latest analysis for Buru Energy

How Does Eric Streitberg’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Buru Energy Limited has a market cap of AU$69m, and reported total annual CEO compensation of AU$719k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at AU$586k. We examined a group of similar sized companies, with market capitalizations of below AU$300m. The median CEO total compensation in that group is AU$380k.

Thus we can conclude that Eric Streitberg receives more in total compensation than the median of a group of companies in the same market, and of similar size to Buru Energy Limited. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Buru Energy has changed from year to year.

ASX:BRU CEO Compensation, February 11th 2020
ASX:BRU CEO Compensation, February 11th 2020

Is Buru Energy Limited Growing?

On average over the last three years, Buru Energy Limited has grown earnings per share (EPS) by 98% each year (using a line of best fit). In the last year, its revenue is up 3.4%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.

Has Buru Energy Limited Been A Good Investment?

Since shareholders would have lost about 8.9% over three years, some Buru Energy Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared total CEO remuneration at Buru Energy Limited 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.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. So you may want to check if insiders are buying Buru Energy shares with their own money (free access).

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.

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