Is Intra Energy Corporation Limited (ASX:IEC) Excessively Paying Its CEO?

Jim Shedd has been the CEO of Intra Energy Corporation Limited (ASX:IEC) since 2016. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Intra Energy

How Does Jim Shedd’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Intra Energy Corporation Limited has a market cap of AU$2.3m, and reported total annual CEO compensation of AU$454k for the year to June 2019. We note that’s an increase of 11% above last year. It is worth noting that the CEO compensation consists almost entirely of the salary, worth AU$454k. We examined a group of similar sized companies, with market capitalizations of below AU$289m. The median CEO total compensation in that group is AU$378k.

So Jim Shedd is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Intra Energy has changed over time.

ASX:IEC CEO Compensation, November 5th 2019
ASX:IEC CEO Compensation, November 5th 2019

Is Intra Energy Corporation Limited Growing?

Over the last three years Intra Energy Corporation Limited has grown its earnings per share (EPS) by an average of 89% per year (using a line of best fit). In the last year, its revenue is up 58%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don’t have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Intra Energy Corporation Limited Been A Good Investment?

Given the total loss of 75% over three years, many shareholders in Intra Energy Corporation Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Remuneration for Jim Shedd is close enough to the median pay for a CEO of a similar sized company .

We’d say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don’t think the CEO pays is too high, but it’s certainly hard to argue it is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Intra Energy shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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 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.