Is Cub Energy Inc. (CVE:KUB) Excessively Paying Its CEO?

Mikhail Afendikov became the CEO of Cub Energy Inc. (CVE:KUB) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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.

View our latest analysis for Cub Energy

How Does Mikhail Afendikov’s Compensation Compare With Similar Sized Companies?

According to our data, Cub Energy Inc. has a market capitalization of CA$28m, and paid its CEO total annual compensation worth US$330k over the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$330k. 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$121k.

Thus we can conclude that Mikhail Afendikov receives more in total compensation than the median of a group of companies in the same market, and of similar size to Cub Energy Inc.. 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.

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

TSXV:KUB CEO Compensation, September 24th 2019
TSXV:KUB CEO Compensation, September 24th 2019

Is Cub Energy Inc. Growing?

Over the last three years Cub Energy Inc. has shrunk its earnings per share by an average of 53% per year (measured with a line of best fit). It achieved revenue growth of 14% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Cub Energy Inc. Been A Good Investment?

Most shareholders would probably be pleased with Cub Energy Inc. for providing a total return of 350% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

We examined the amount Cub Energy Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. But clearly there are some positives, because investors have done well over the same time frame. So on this analysis we’d stop short of criticizing the level of CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Cub Energy.

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.